Andrew Griffiths, Assistant Treasurer, Anglia Water presentation at the UK ACT’s Cash Management Conference last month, entitled ‘The quest for cash visibility’, described their journey in making cash fully visible and fully incorporated at the heart of business planning. It contained several important stories and lessons about making cash visible and integral to all business planning, and how to carryout effective cash flow forecasting:
- store cash forecasts for all departments and business units in one place, e.g. Anglian Water hold theirs in the centrally hosted TMS
- make sure you have a clear view of the cash in each bank account and in the pool structure
- receive automated bank balance reports intra-day (Anglia Water have four feeds/day) so that you have full visibility throughout the day
- make all payment centrally from the TMS, so can see cash position throughout the day
- have just one view of all cash. Anglian Water moved all daily cash management processes into the TMS, so that they have an integrated view of whole cash position including: the business driven cash flows, the receipts, the debt management, cash payments, etc.
- demand a daily cash forecast from all business units and departments, so can see each cash forecast for any bank account, over any period
- key lessons in making their cash flow forecasts:
- make corporate treasury part of the business and the decision making process, not a separate obstructive unit, so “we are all in there to deliver”
- monitor and manage accuracy of cash forecasts
- ensure that corporate treasury is persuading and engaging all business units in the process of caring for cash
- give the corporate treasury responsibility for reporting cash actuals to senior management.
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