By answering the right questions and identifying what our client actually needed, data analytics helped our client better predict cash flow and reserves as a result of forecasting and more accurate predictions.
Our client—a financial institution that provides outsourcing services related to payments—needed help to better understand and project daily cash flow and reserves to achieve the best return on payment activities. A change in CFO identified the existing method of forecasting as inefficient and inaccurate, resulting in discrepancies between forecast and actual reserves and cash flow. Knowing there had to be better tools and techniques to improve this process, the client asked the important question: how?
Our team undertook a three-week data exploration project to assess our client’s data, identify what they needed to achieve their objectives, and determine if such predictions could be made accurately. As we examined their data, we discovered they could use data analytics to predict their daily cash flows quite accurately on an annual basis without the need of an expensive company-level analysis. As such, we recommended an approach that combined the development of a forecasting model with the implementation of Tableau in tandem—an easy-to-use investigative tool for those instances the forecast is off from actuals. The model helped our client come to a much better understanding of how unique events affect their overall cash flow, and also helped to identify the root cause of discrepancies between their existing forecasts and cash flow.
Prior to implementing our model, the client did not understand the entire process of payment activities because there was no method to see the complete picture. We were able to give them a comprehensive approach for understanding how their business works and how unique events might affect their day-to-day cash flows and operations. When it comes to predictive analytics, organizations are challenged with determining the best way to forecast future events, such as sales or cash flows, and figuring out the best way of getting there.
Data and Analytics, Risk Assurance Partner
Tel: +1 905 815 6332