s we edge away from the financial crisis it is apparent that some of the lessons learned over the last few years will not easily be forgotten. The interest that board members have shown in cash and liquidity management is not going to fade, and treasurers are now working in an environment where they have to explain what they are doing to a wide group of stakeholders.
One of the key areas of cash management that treasurers are learning to communicate about in more detail is cash forecasting. It is widely acknowledged that this is a hard task to do well. Forecasting is a mug’s game at any time but particularly when volatility is such a reality for many businesses. But it is this very lack of certainty that makes the need to examine closely the inflows and outflows even more important.
Treasurers need to work harder and smarter in the area of cash forecasting. At the same time they need to work with all areas of the business, including the board, on what the forecasts they produce actually mean and how the business can shape its own future in the way it deals with cash. No easy task, but a crucial one.