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How CFO’s and finance professionals can leverage artificial intelligence for accurate cash forecasting

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In the current context, maintaining a positive cash flow is especially important to a company. With payment prediction, companies can anticipate cash flow and make sure the relevant actions are taken in order for it to be positive. Let’s dig into this.

Staying financially healthy in turbulent times is a challenge

A financially healthy company is more likely to get a smoother ride in turbulent times, when the unexpected seems to be the usual. The two past years have given us quite a ride, adding layers to the challenge of staying financially healthy.

Decisions around Covid have brought a toll on countless companies, leading many to go out of business; lately, the invasion of Ukraine by Russia has added to the global economic uncertainty; inflation is reaching record high levels, driven noticeably by the soaring price of commodities. Experts say the inflation could have already reached its peak in the US. But, according to the ECB, the inflation in the European bloc is expected to go higher in the near future.

Traditionally, inflation will cause prices to increase fast; it will lead to shortages of finished goods; and it accelerates disruption in the supply chain. At the same time, borrowing can become more expensive, with less available loans.

This is why positive cash flow is especially important in these circumstances. It enables companies to mitigate risks and manage unexpected events.

Artificial Intelligence at the service of your finance teams

In order for your company to stay cash flow positive, you want to make sure that your customers are actually paying the invoice sent by your company. Following-up on open invoices can feel abysmal and frustrating. Going after indebted customers requires patience and tactfulness. Establishing the goal to reach in terms of collection for a given period – and the strategy to achieve it – can seem out of reach. This is especially the case if the finance team is dealing with dozens of unstandardized spreadsheets.

Artificial Intelligence in Fintech is radically changing the game. It’s leading to innovative, fast and reliable solutions. By automating routine tasks and unstandardized tools, these solutions significantly improve operational efficiency and increase cash flow accuracy.
With Artificial Intelligence, these SaaS solutions effectively enable companies to accurately predict their customers’ payment behaviors. The anticipation allows for informed decision-making when it comes to the collection strategy and enables the finance team to predict the amount recovered for a given period.

AI software = accurate predictions?

Cash forecasting is a real asset for any company that wants to ensure that it can meet its short-term obligations. In the current context of economic backdrop, this is even more true. Understanding when and how open invoices will be dealt gives any company a significant competitive advantage. Accurate and reliable predictions of customer payments enable businesses to regain control.

However, the cash flow forecasting challenges are multiple. What is the amount at stake? Which customers to go after in order to collect amounts due? In what order? When to expect payment by a given customer? And so on.

Modern Fintech uses Artificial Intelligence to meet these challenges. Predicting payment patterns, and enabling finance teams to collect due invoices, before they get unpaid, are now a reality. Software fueled by Artificial Intelligence offers companies the tools to predict customer payment behaviors. With that, they can pro-actively manage accounts receivables, collect payment on time and regain control on cash flow.

Want to know how it works and how it can be applicable to your business? Book your demo with AiVidens here.