Predictive cash forecasting Automations

AI’s Role

AI algorithms can identify and extract relevant financial data from unstructured sources like emails, contracts, or news articles. This expands the data pool for analysis and forecasting.

Automation

Automated data pipelines collect and consolidate financial data from various sources, including:

  • ERP systems: Accounts receivable, accounts payable, inventory data, sales orders, purchase orders
  • Banking systems: Bank statements, transaction details
  • Other sources: Payroll data, tax information, external economic data

AI’s Role

AI can be used for anomaly detection, flagging unusual transactions or data points that might require further investigation.

Automation

Automated scripts clean and standardize the data, addressing inconsistencies, missing values, and outliers. This ensures the data is reliable and suitable for analysis.

AI’s Role

Machine learning models can identify and create new features from the raw data that are relevant to cash flow forecasting. Examples might include:

  • Customer payment patterns: Average days to pay, payment frequency, payment method
  • Supplier payment terms: Discount rates, early payment incentives
  • Seasonal trends: Fluctuations in sales or expenses related to specific periods

Automation

The system automatically generates personalized early payment offers for suppliers, clearly outlining the discount amount and payment terms.

AI’s Role

Machine learning algorithms (e.g., time series forecasting, regression models) are selected and trained on historical data to identify patterns and relationships between input features and cash flows.

Automation

The system can automatically test and compare different models, selecting the one that performs best on historical data.

AI’s Role

The trained AI model analyzes the current and historical data to predict future cash inflows (e.g., sales revenue, customer payments) and outflows (e.g., supplier payments, payroll, taxes).

Automation

The system generates forecasts at different time horizons (daily, weekly, monthly) and for different scenarios (best case, worst case, most likely).

AI’s Role

AI can simulate the impact of these changes on cash flow, helping businesses make informed decisions.

Automation

The system allows users to create and test different scenarios by adjusting input parameters (e.g., sales growth rates, collection rates, payment terms).

AI’s Role

AI-powered dashboards can provide insights and recommendations based on the forecast, such as highlighting potential cash shortfalls or identifying opportunities for early payment discounts.

Automation

The system automatically generates reports and dashboards that visualize cash flow forecasts, actuals, and variances.

AI's Role

AI algorithms can identify and extract relevant financial data from unstructured sources like emails, contracts, or news articles. This expands the data pool for analysis and forecasting.

Automation

Automated data pipelines collect and consolidate financial data from various sources, including:

  • ERP systems: Accounts receivable, accounts payable, inventory data, sales orders, purchase orders
  • Banking systems: Bank statements, transaction details
  • Other sources: Payroll data, tax information, external economic data

AI's Role

AI can be used for anomaly detection, flagging unusual transactions or data points that might require further investigation.

Automation

Automated scripts clean and standardize the data, addressing inconsistencies, missing values, and outliers. This ensures the data is reliable and suitable for analysis.

AI's Role

Machine learning models can identify and create new features from the raw data that are relevant to cash flow forecasting. Examples might include:

  • Customer payment patterns: Average days to pay, payment frequency, payment method
  • Supplier payment terms: Discount rates, early payment incentives
  • Seasonal trends: Fluctuations in sales or expenses related to specific periods

Automation

The system automatically generates personalized early payment offers for suppliers, clearly outlining the discount amount and payment terms.

AI's Role

Machine learning algorithms (e.g., time series forecasting, regression models) are selected and trained on historical data to identify patterns and relationships between input features and cash flows.

Automation

The system can automatically test and compare different models, selecting the one that performs best on historical data.

AI's Role

The trained AI model analyzes the current and historical data to predict future cash inflows (e.g., sales revenue, customer payments) and outflows (e.g., supplier payments, payroll, taxes).

Automation

The system generates forecasts at different time horizons (daily, weekly, monthly) and for different scenarios (best case, worst case, most likely).

AI's Role

AI can simulate the impact of these changes on cash flow, helping businesses make informed decisions.

Automation

The system allows users to create and test different scenarios by adjusting input parameters (e.g., sales growth rates, collection rates, payment terms).

AI's Role

AI-powered dashboards can provide insights and recommendations based on the forecast, such as highlighting potential cash shortfalls or identifying opportunities for early payment discounts.

Automation

The system automatically generates reports and dashboards that visualize cash flow forecasts, actuals, and variances.

Example Scenario

Optimizing Cash Flow for a Retail Business