Get control of your cash. Whether you need to run simulations to optimize short-term cash requirements or play what-if analysis by varying payment terms, CCH Tagetik’s Cash Flow Planning & Analysis immediately displays the results on your financial statements. You can then choose the scenario that optimizes your cash position.
To give you the best coverage of invested capital — and satisfy your stakeholders’ need for maximum value — use our integrated planning solution to put financial KPI targets at the heart of cash flow, balance sheet and P&L statement preparations. For more precise cash flow projections, use our direct cash flow drivers to create accurate balance sheets, build realistic cash flow plans and manage cash effectively. Reduce financial risk and improve liquidity with CCH Tagetik.
3 reasons why CCH Tagetik Cash Flow Planning and Analysis lets you focus on your business
Optimize working capital and manage risk with CCH Tagetik Cash Flow Analysis
Monitor cash-in and cash-out to optimize liquidity. CCH Tagetik enables you to analyze the impact of business changes on cash flow forecasts as they occur, while giving you visibility into your net financial position at all times.
- Visualize cash position in real-time via dashboards
- Make multiple cash flow plans by line of credit
- Play what-if cash position by varying financial policies
- Create driver-based direct cash flow projections
- Compare real-time and historical data via deviation analysis
Prepare for growth and worst-case scenarios with CCH Tagetik Cash Flow Planning
Always know when and where money is due. CCH Tagetik’s built-in cash flow intelligence help you prepare for the short-, medium-, and long-term cash requirements.
- Vary cash flow drivers by any dimension like BU
- Test multiple scenarios using different collection terms
- Easily define models to calculate DSO, DP0, payment terms
- Formulate net financial position via prepacked calculations
- Create cash flow forecasts using double-entry accounting
What is cash flow?
Cash flow, also known as net cash flow, is process of monitoring cash in and cash out during a specific period of time.
Cash flow is used to evaluate the performance of a business or project, and often to monitor liquidity and ensure that there’s enough cash available to keep the lights on. Cash flow is also used to examine a business's growth, whether it’s able to grow, or whether it needs to take measures in order to pay the bills. Positive cash flow is what every business aspires to. It means business is healthy and expanding, and able to make new investments.
Cash flows come in from three areas: operations, financing, and investments.
In order to analyse the cash flow, the direct method and the indirect method are two cash flow methodologies. As we discuss in the cash flow statement definition, in the direct method, amounts for cash from customers and cash paid to suppliers are listed and net income is reconciled to cash by operating activity. When using the indirect method, which is commonly preferred, the net income is listed, followed by adjustments - adding or subtracting balance sheet items - which bring the figure from an accrual basis to a cash basis. This method is more accommodating to factors like depreciation.
What is cash flow analysis?
Cash flow analysis is the analysis of a company’s cash flow - cash in and cash out - over a specific period of time. It typically looks at the difference between cash at the beginning of the period and compares it to cash at the end of a period. Ideally, the cash flowing in will be greater than cash going out. Cash flow analysis is essentially a health check performed by finance in order to ensure that all expenditures are accounted for, leaks are identified, and free cash is actually free. Cash flow analysis gives insight into short-term and long term financial viability of a company by projecting the cash flow statements into the future over varying time periods.
Key to cash flow analysis, finance uses the cash flow statement, the balance sheet and income statement to analyze cash flows and assess liquidity, viability and solvency.
What is a cash flow forecast?The definition of a cash flow forecast is a plan that shows you how much money your organization expects to receive and pay-out over a given period in the future. It’s developed from historical averages and consists of projected income and expenses. As a result, the cash flow forecast predicts cash-in and cash-out to give you a more precise understanding of your solvency than, say, merely looking at your bank account balance. Your bank account might show you what’s happening right now, but it lends no insight into what’s happening tomorrow.
Why are cash flow forecasts important to a business?Cash flow forecasts help you understand if your organization has enough working capital on hand to operate, while paying bills and meeting debt obligations. In other words, cash flow forecasts help you plan how much cash you’ll need in the future. By manipulating operational drivers or playing out various business scenarios — like promotions, big deals, or a dip in sales — you can use the cash flow forecast to predict periods of high or low liquidity and determine times when you’ll need more cash on hand.
What are cash flow forecasts used for?
Cash flow forecasts are an incredible tool for understanding how much cash will have at a certain point of time and identifying your future cash needs.
there's a lot you can do with your cash flow forecast. It's a predictive report that has a ton a strategic value. By playing out business scenarios — whether financial or operational, best case or worst case — on your cash flow forecast, you can better predict your that scenario's cash impact. If you can identify a surplus of cash or a shortage on the horizon, you can then plan to welcome — or circumvent — that outcome.
At the end of the day, cash flow forecasting helps you avoid insolvency. In other words, running out of cash in a scenario where liabilities exceed assets, debt overtakes revenue. For most, this means turning the lights off — likely not a situation you want.
What is cash flow planning?
Like the cash flow forecast, cash flow plans are the strategic documents that allow a company to plan the cash in and cash out over a period of time by identifying major expenditures and planned investments. Using this document, companies can improve:
- The way they spend and reserve cash
- Monitor when cash is tight
- Better understand profit margins
- Planning for growth
- Create budgets
What is financial statement analysis?
Financial statement analysis is the process of evaluating a company’s financial position and financial future by reviewing its past and present financial statements and projecting those forward. Analysts, investors, government, regulators, stakeholders and executives undergo this process in order to evaluate a company or make sounder business, investing decisions. The financial statements most often used as a gauge for analysis include: the balance sheet, cash flow statement, income/P&L statement and equity/earnings statement.
There are five commonly used types of financial statement analysis:
- Fundamental analysis: The threefold process of analyzing company, the economy and industry
- DuPont analysis: Analyzing return on equity through profit margin, total asset turnover and financial leverage
- Horizontal analysis: A comparison of financial information over time by comparing past and present statements against one another
- Vertical analysis: Analyzing financial statements in percent through normalization
- Financial ratios: Analyzing a company based on its liquidity, profitability, activity and leverage ratios
What is credit analysis?
Is your business credit worthy? Will you be able to pay-up where obliged? Credit analysis performed in order to determine whether an organization is credit worthy. The analysis involves measuring debts and bonds in order to determine whether a company can repay them or if there is a likelihood of default.
Credit analysis techniques include: ratio and trend analysis, cash flow analysis and looking into the future through modelling and forecasting.
Banks often review credit before approving corporations for a loan, using an analysis of cash and the debt service coverage ratio in order to determine whether a suitable cushion exists.
The following analysis is required:
- KPIs by customer, company and/or consolidated level
- Cash in control
- Monthly differences
- Performance analysis of sales manager and credit managers
- Cash flows analysis
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