Working capital is the lifeblood of most organizations and, as such, it needs to be watched closely and managed in a comprehensive, real-time, and proactive manner.

All finance departments must manage working capital to keep their business operations running, while maintaining the agility to support the strategic goals and growth objectives of their business. Working capital management and optimization are key to assuring a business can maintain production, cover the cost of wages and supplies – and also have enough liquidity on hand to service their short-term credit obligations.

Any gaps are likely to be filled by external capital – usually at a higher cost than internally available funding. Being able to accurately measure and manage working capital, and avoid expensive external financing, can provide companies with an important competitive advantage.

Most CFOs use working capital as a key indicator of the operating health of the business. They focus on questions such as: Are we collecting our bills in a timely manner? Are we taking all the discounts that we are entitled to? Are we carrying too much inventory in our warehouses?

These basic metrics all have a direct impact on liquidity. However, the answers to these key working capital questions are inherently dynamic and constantly changing.

As we move into Fall, there are a number of important events coming up for CFOs and other finance leaders, where you'll get a chance to network with colleagues and talk with experts in creating and implementing solutions for treasury, compliance, disclosure reporting and other related finance management issues.  Bramasol is proud to be a participant and in some cases an enabling sponsor for the following key conferences.  Please plan to join us.

Treasury functions are not easily isolated from the rest of operational applications that are typically spread throughout an organization – nor should they be.  In fact, almost all treasury processes can benefit greatly from becoming more integrated with other business processes. 

However, all too often, companies are enticed by the promises of standalone treasury and risk management applications that claim to be inter-operable but fall short of providing true seamless integration with core ERP business and finance applications.

The strategic importance of treasury has been increasing steadily in recent years, thereby leading to a proliferation of new capabilities from both standalone application vendors and broad-based ERP/finance systems providers.

Companies are also coming under more pressure from shareholders and regulators to increase their transparency and improve financial performance. These expectations are leading to significant changes to the treasury functions as activities are increasingly being centralized. 

At the same time, most companies are experiencing more complexity with regard to changing compliance requirements, diverse global operations, regional and local regulatory mandates, international trade and foreign currency issues, geographically diverse banking relationships and escalating risk factors in the financial arena.

At the recent SAPPHIRE NOW and ASUG Annual Conference, Bramasol presented our Comply, Optimize, Transform™ finance innovation approach, which is designed to build on the things that you “have to do” such as Compliance with accounting standards and using those changes to drive Optimization of related business processes. Ultimately, the goal is to leverage the journey through compliance and optimization to achieve Finance Transformation.

In this blog, we are taking a closer look at Machine Learning, which is one of the most important new tools for taking that first step from Compliance to Optimization, while also establishing capabilities to build from for moving from Optimization toward Transformation.

As companies face exponentially growing amounts of data that can overwhelm individuals decision-making ability, the emergence of Machine Learning provides an powerful new method for helping people improve decision-making bandwidth, responsiveness, accuracy and consistency of results.

In previous blog posts, we’ve looked at several key issues facing companies and particularly finance leaders in the Office of the CFO, by covering topics such as Building Finance Innovation on a strong Compliance Foundation, Changing Roles and Responsibilities for the Office of the CFO, The Shift Toward Predictive Accounting, and Analytics is the New Face of Financial Transformation.

Companies operating in today’s diverse global environments face unprecedented challenges with regard to managing capital assets, especially cash accounts that are distributed throughout multiple operating entities in different countries.  These challenges are exacerbated within companies that have grown via merger and acquisition (M&A) strategies, which often results in trying to manage cash accounts across a variety of legacy financial systems.

CFOs and treasury departments need to optimize their companies’ cash agility amidst volatile foreign currency exchange (FX) environments while also complying with constantly changing regulatory environments and escalating global competitive pressures.

At the same time, many companies are realizing that leveraging new treasury-focused technologies and best practices in cash management can provide valuable benefits in terms of improving operating results, maximizing asset utilization and enhancing their ability to quickly respond to new opportunities.

Instituting strong enterprise-wide cash management is also saving valuable time and resources, thereby enabling finance staff to better contribute to high-value activities such as analysis, planning and decision support.

People are hard-wired to recognize and interpret faces with amazing speed, accuracy and attention to detail. Even as infants we quickly learn to know our own parents’ faces and to differentiate them from strangers’ faces. Throughout life, the ability to automatically pick up on subtle facial cues and to “read” the meaning behind them are critical factors for streamlining complex social interactions and enabling rapid decisions such as friend vs. foe, and cooperation vs. opposition.

Imagine if you met someone without a face. How would you even begin to interact with them?

Well, that’s how most CFOs and other C-level executives feel when they hear the term “Financial Transformation” without a way to clearly visualize what it means.

Accounting has traditionally been a backwards looking profession.  Let me be clear that I did not just call accountants backwards people, but in general their mandate has been to document, audit and verify what has already happened.

Some of the forces helping make these changes a reality are enterprise-wide integration of advanced analytics, unifying financial information in a single-source-of-truth, movement toward continuous-close processes and the rise of Machine Learning.

As companies grapple with accelerating changes across most global markets, they face critical challenges for staying ahead of competitors, sustaining growth, maximizing profitability, complying with regulatory requirements and establishing organizational agility to respond quickly to the unexpected.