Forecast: Cloudy
A KPMG study of corporate practices in working capital management, which was released last week, shows that organizations are doing a poor job of forecasting cash flow. This comes as little surprise in today’s economy; still, the numbers are staggering. Of the 556 finance executive participants, who come from companies across the U.S. and Europe, 95 percent expend the energy to forecast cash flows, but only 14 percent claim that their cash flow forecasts were accurate over the past year. Said Brad Hillier, a managing director in KPMG’s advisory services practice, “Many companies do not gather the right data to produce accurate forecasts, nor do they have the right people involved in the process. In addition to improving the forecasting and reporting processes, executives should consider using other best practices, such as targeting metrics and establishing dashboards and controls that offer better visibility into cash performance.”






