I’m all for making things simpler. Why use one hundred words to say something you could do in just ten? That’s one reason I like this recorded presentation, which running at just under ten minutes is just enough time to give me the information that I need, without making it a laborious process. So, if you have ten minutes for a short break from your daily activity, then why not have a look at this new whiteboard describing how SAP solutions for LoB Finance can help organizations achieve financial excellence.
I’ve once worked for a company that was making truly wonderful profits but running out of cash because we were growing too quickly as we were intent on building market share so we could sell it off at a good multiple. Believe me it wasn’t fun at the time and we ended up taking some desperate measures like selling the furniture off and leasing it back so we could pay the staff. It all worked out OK, but the acquiring had to inject a tranche of working capital to put the ongoing expansion on an even keel.
We made a positive choice to follow that risky path but with banks less willing for provide lines of credit and an overall decline in demand for most goods and services, cash-flow and liquidity are once again top of the mind for CFOs and CEOs because they are all too aware that their bigger, long-term goals will never be achieved if short-term liquidity obligations cannot be met. Against this backdrop, most companies must increasingly depend on their commercial cash flows to sustain their business. My colleagues Chakib Bouhdary and Jim D’Addario have just written a new Executive Insight titled Managing_Cash_Flow_in_Times_of_Crisis_Executive_Insight that sets out best practice for protecting cash and liquidity that clearly shows that it is strongly correlated with a reduced Days Sales Outstanding (DOS) -See the graph to the right. One company they mention is Paris based Stef-TFE Group that implemented SAP ERP Financials that provides real-time management of collections and dispute processes and immediately reduced DOS by 3 days and bad-debt write-off by 10% which are exactly the types of improvement needed to improved cash flow in the current environment.
SAP has also recently launched a starter kit for liquidity planning with the SAP® BusinessObjects™ Planning and Consolidation application, version for the SAP NetWeaver® technology platform, that helps companies quickly deploy a solution to automate liquidity forecasts and improves their accuracy. The kit provides users with detailed cash-flow information, allows them to model the impact of different company and currency scenarios on cash flows, and prepare executive reports based on those scenarios. You can read all about it here – Fast Track to Improved Liquidity Planning
By Joe Pacor, Director of the ERP Financials Solutions Marketing at SAP
The ongoing credit crisis, crunch or contraction (you choose the name) presents an opportunity to review an underlying discipline: Credit Management. The 12 years I spent in corporate financial management helped me sort thru the many challenges within this area. The metaphor of the double-edged sword quickly came to mind, as Credit Management continually balances the good and the evil. For instance, offering additional credit to support the sales’ initiatives is great news for the eager account executive, and improves the corporate top line as well (good). However, Continue reading