Cash flow reporting forecast built under pressure

Situation

A global furniture retailer was caught in the consequences of a large-scale fraud discovered at its parent company. Lenders and other stakeholders immediately wanted to know the true cash position of the operating business, and they wanted it frequently and from a source they could trust.

The business was trading normally. What it did not have was any way to report cash to the standard now being demanded.

Constraint

Trust in reported information was the central problem. Numbers coming out of group could not be relied on, so anything produced had to be traceable to primary sources such as bank statements and supporting documents.

There was also no time. Stakeholders needed reporting within days, not after a design phase, and a refinancing had to complete over a single weekend to keep the business funded.

What was built

A cash flow reporting process created from nothing: daily and weekly cash reporting for the operating business, built from bank data and reconciled to source, with a defined submission and review cycle and a clear owner for each input.

The output was designed for an audience that started from suspicion. Every figure could be traced to a document. Assumptions were stated. Changes between reports were explained rather than left to be noticed.

Alongside it, the refinancing was project managed to completion over a weekend, with the information stakeholders needed produced against that timetable. Reporting to lenders and other external parties then continued for months afterwards on the process that had been built.

Who it was built with

The local finance team, who ran the daily cycle once it was established and who needed it to be simple enough to survive a bad week. Treasury and the banking relationships supplied the primary data. External stakeholders and their advisers shaped the reporting format, since the report only worked if they believed it.

Outcome

The refinancing completed on time and the business stayed funded. The reporting process held up over the following months as external scrutiny continued, and gave the business a defensible cash position throughout.

What this looks like for you

When confidence in your numbers has gone, the reporting has to be rebuilt from primary sources, not improved at the edges. It can usually be done in days rather than weeks, and it is what buys the time for everything else. See FP&A automation and AI.