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What are we saying when talking about cashflow ?
The different kind of cash-flow: Two methods:
Direct method: a treasury vision of inflow and outflows (a treasury explanation of the variation) Indirect method: an operational vision of the cash / debt variation
Different explanations: Cash variation explanation Net debt variation
Different aggregation: Operational cashflow, free cash-flow CAPEX, cashflow from investing activities Cashflow from financing activities
The method that will be explained is mainly for indirect but is not limited to any explanation variation or aggregate
2
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What are the main problem faced in the systems ?
Difficulties to have dedicated cashflow by scenario / year One cashflow for all the scenario Not able to setup or make evolution on cashflow
Bottleneck in the rules calculation (with long consolidation time) No link with treasury reporting
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We noted on HFM Application 3 recurring problems:
Lake of auditability and difficulties to understood an amount Not able to drill down No possibilities to understood easily an amount
or
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What is the technical explanation ?
The method that should not be applied: Hard coded rules for cashflow
Not data driven: the crossing are always calculated, regardless of presence of data in the system
Generating huge amount of zero Slowing down the system
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Realized with that method in 70% of the
applications
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What should be the perfect solution ?
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Easy to maintained
Easy to design
Easy to analyze
Good calculation performance
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What do we propose ?
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Auditability / Analysis
Very good performance (compare to what the market propose)
Zoom capabilities to drill until an amount
Dynamic webform to analyze easily the Cashflow
No need to manage rules to understand and update cashflow: setup is done in
the metadata
Flexibility / Evolutionary
Very good performance (compare to what the market propose)
Possibilities to manage different cashflow (one by period, or one by scenario)
Dynamic webform to analyze easily the Cashflow
No need to manage rules to understand and update cashflow: all the setup is
done directly a admin webform (as ownership)
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What is the first method ?
First one realized to improve auditability
With a single zoom you can determine the crossing which are feeding the amount The cashflow is easy to maintain: just have to add the crossing which are associated to
the cashflow line Best way to create an audit trail for your cashflow
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Design Usage
Demo
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What is the second method ?
Second one realized to improve maintainability
You can setup your cash flow (and associated webform from HFM Interface) from a webform
You can make evolution inside the cashflow by month (and maintain previous setup on previous month)
You can have different cashflow between Budget / Forecast & Actual
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Design Usage
Demo
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How can we manage implementation risk ?
Concerning operational riskNo risk on data production: Possibilities to maintain both cashflow (old and new one) to secure productionNo risk of regression: The cashflow design is based on the cashflow used
Concerning planning riskThe methodology of implementation is industrialized: we apply always the same method to guaranty that the planning and result are in line with customer expectationNo risk of regression: The cashflow design is based on the cashflow used
Concerning budget risk:The workload is fixed
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What is the implementation matrix ?
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Specification Development Validation Training and documentation
Determine and design (in Excel) the Cash Flow
Goal
Prerequisite
Workload
Delivery
Implement in HFM the cashflow Validate the cashflow with data Prepare documentation process
Realized with that method in 70% of the applications Validation of specification Finalize development N/A
From 2 days to 5 days 4 daysTo be defined
(depends of the support, number of period and entities)
3 days
Cashflow specification and Excel simulation tools
HFM Rules and metadata, and one webform by Cashflow lines Cashflow validation form
5 process sheets that describe, maintenance (admin support)
GoProd
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Next steps
Link it with cash and treasury reporting See our webinar on Treasury reporting application
1212
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Register you to our next webinar on cash reporting in HFM
Benoit LASCOLSSenior [email protected]