On-Demand Cash View Uncovers Hidden Revenue Opportunities and More

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CEOs and boards are clamoring for more data from finance. According to McKinsey & Company, they want “CFOs and the finance function to provide real-time, data-enabled decision support” in particular.

The most elemental piece of decision-supporting data the CFO can generate for the board is a true picture of current cash at any given point in time. This requires an on-demand cash view, which, unlike the traditional cash flow statement or direct method forecast, reveals potential growth opportunities and worrisome trends in time for your business to take the most advantage of that information.

Hidden Growth Opportunities

With a real-time cash view, finance teams can detect opportunities like these in real-time, which means businesses can immediately act on them to generate more revenue:

  • Individual customer demand: An upsurge in a specific customer’s purchases or usage (in usage-based pricing models) could indicate that they’re scaling up. When finance detects the uptick, they can quickly engage sales to reach out to the customer to proactively understand and meet their needs.
  • Overall market demand: An uptick in sales of specific products or services could foreshadow a coming change in market demand. Finance, sales, and operations can quickly assess the trend and act on the need to ramp up production, hire additional staff, and market your capabilities while your competition remains flat-footed.
  • Sales activity: An increase in a salesperson’s closings could suggest they’ve found a new recipe for success, such as a better prospecting technique or turbo-charged sales presentation. Seeing the uptick in real-time lets managers quickly replicate the tactic throughout the salesforce, amplifying its effect.

Underlying Risk Issues

Risks hide within the data, too. By the time they become apparent from static periodic financial reports and forecasts, the damage could be irreversible. But with a real-time cash view, negative trends like these are discovered and addressed before they can cause lasting problems:

  • Customer inactivity: When a customer’s purchasing level decreases, they may no longer be satisfied with your product, fulfillment, or customer service. Early identification of this gives you the chance to pinpoint the problem and develop a plan to salvage the customer relationship.
  • Slow-paying customers: Immediately catching an unexpected lag in customer payment offers the best chance of getting them back on track as soon as possible. Sales can use their knowledge of the customer to recommend the best way to address the collections issue with the customer.
  • Slow-paying market: A slowdown in payment for a particular product or service or in a specific market could be signs of trouble in a certain sector. Picking up on this trend before it explodes allows your finance and sales teams to investigate and come up with a mitigation strategy.
  • Sales inactivity: When sales management doesn’t have to wait until the end of the month to see that a team member is underperforming, they can turn around the situation before it negatively impacts that period’s overall sales productivity.

Staying a Step Ahead

A month-end cash flow statement is outdated before it's ever shared. The only way to see the good or bad coming around the corner is with an on-demand cash view. Let Tesorio show you how.