Cash is king: I, You, They, We must all ‘think’ cash!

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Cash is king: I, You, They, We must all ‘think’ cash!

Read the discussion between David Brault, Managing Partner of Objectif CASH, and Clément Letourneux that took place at ACA during our conference ‘Treasurer & CFO, a winning duo.’ In this article, they talk about best practices for spreading ‘cash culture’ because ultimately ‘cash is king.’

Anticipation is the keyword

David Brault  : Your keyword is anticipation. Do you agree that it’s the treasurer’s motto?

  • Raising awareness among all people involved

Clément Letourneux : ‘Imagine driving a car while only looking out your back windscreen: you’ll plough head-on into a wall! If you manage cash flow by looking only at the past, that’s not going to work. Indeed, you need to anticipate and aim for financial optimisation in order to maintain cash flow.

As a treasurer, I have always worked to get the entire company ‘thinking’ cash. That’s an important concept because it’s the basis that allows the entire company—finance, buyers, salespeople, the supply chain, IT, operational staff—to prepare to share the idea of cash flow. In a small or medium-sized company, there won’t necessarily be a treasurer hired to manage that aspect. So, you have to raise awareness in all departments in order to change mentalities and ways of operating.’

Advice?

David Brault : What advice can you give to treasurers about how to spread this ‘cash culture’?

  • Implement best practices and choose your tools

Clément Letourneux : ‘The person in charge of cash flow has the mission of anticipating, planning, and alerting management. It’s up to that person to establish best practices in order to have EPM [enterprise performance management] that includes cash flow. To do that, you need to work with the accounting department so that, for example, you can find out where the intercompany cash flows are.

It’s a matter of establishing a virtuous cycle to affect the company’s EBITDA position and thus its production processes. Such an approach requires the implementation of cash flow software. Once that’s done, it’s easy to generate short-term projections—using the direct method—or to establish cash pooling and daily cash flow balancing. And let’s not forget all other aspects like security, fraud protection, banking standards, etc.’

In Conclusion : 

‘All in all, managing cash flow is about giving yourself tools that can automate processes so that you can really focus on analysing and anticipating. The market has evolved a lot and now offers high value-added solutions for companies.

Don’t be making cash flow projections at the last minute: that can cost you dearly!’

Do you want to learn about our range of solutions for managing cash flow projections? Visit our dedicated page and read testimonials from customers.