Monitoring provisional cash-flow generation indicators and professionalising our financial communications process

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Monitoring provisional cash-flow generation indicators and professionalising our financial communications process

Interview with Yann FEJAN, Cash Modeling user

About Cenexi

European industrial group for pharmaceutical subcontracting

The CENEXI group, held by Phinex Holding, is made up of 3 subsidiaries: Cenexi and Cenexi Services, located in France, and a third subsidiary in Belgium, Cenexi Laboratoires Thissen, acquired in 2012. The group specialises in pharmaceutical subcontracting, and works with labs around the world that entrust it with manufacturing their medications.
As of 2014, the group employed about 1,000 people and its annual revenue was 120 million euros.

Yann Fejan, Group Financial Controller

Yann Fejan, who has served as Group Financial Controller for over a year, worked for six years as Cenexi’s Accounting Director.

As a result of the group’s LBO situation, he’s quite familiar with the factors underlying communication with financial partners: frequent and regular communication focused not only on accounting aspects, but financial aspects as well, like provisional cash flow generation.

He sat down with us to explain how he uses Cash Modeling to produce his analyses of the group’s cash flow.

 

Background: professionalising the group’s communications with financial partners

What tool were you working with before Cash Modeling?

Before switching to Cash Modeling, all of our cash flow was managed in spreadsheets: both the daily aspects and, once a year, the 12-month cash flow forecast relative to the budget.

Why did you choose to leave the spreadsheet model behind and switch to a specialised application?

First and foremost, to make our forecasts more reliable! We wanted to offer our financial partners a forecasting process based on a well-known tool that’s more professional than Excel. The second reason is that Cash Modeling makes it relatively easy to capture the concept of “intra-group” and to have a much more fine-grained view of the Group’s cash flow.

To be perfectly honest, once I looked at the Cash Modeling tool, there was absolutely no doubt in my mind! 

What are the main benefits of using Cash Modeling?

An overall philosophy similar to Excel

The cash forecasting model provided by Cash Modeling is based on the same basic philosophy as everything I had previously set up in Excel. So I didn’t have to change the way I did things.

Very fast deployment

The deployment went very quickly – I think it took less than a month. The part that takes the longest time to design — unwinding cash inflows and outflows via statistics, and the definition of the cash flow rules — was already there and ready to go in my Excel files. I just had to give my tables to the CashSolve consultant.

A collaborative model

There are now 4 of us using Cash Modeling: the Accounting Director for France, the CFO for Belgium, the CFO for France, and myself. So all of the companies are managed with this tool, and from now on, any time we acquire a company or subordinate entity, we’ll integrate it into Cash Modeling.

Easy to update forecasts

We now prepare an annual forecast and an update every month by integrating the final balances for the month and the new customer/supplier, tax and investment timetables. So the update to the cash flow forecast is part of our monthly financial reporting process.

To conclude

“With Cash Modeling, we can provide our financial partners with cash flow forecasts from a well-known tool with a reliable process that’s much more structured and secure than Excel.”