We’ve got to admit – automated cash flow forecasting is one of the hardest puzzles for any finance team and any tech provider to solve. No tool can magically predict the future with 100% accuracy.
Working with hundreds of finance teams at Trovata, we’ve also noticed that each one tends to have its own particular forecasting philosophy – and rightly so – since every business is different.
Despite those complexities, most finance teams do typically look at the same aspects from a high level, whether it be to predict their short-term forecast (like a 13 week forecast) or their long-term forecast. Knowing this, we set out to create a helpful tool for automated cash-based forecasting that saves teams time and saves them from much of the frustration of forecasting in spreadsheets.
In this post, we’ll dive into the four main benefits Trovata customers experience when they use our cash flow forecast automation tool.
- The primary benefit of Trovata’s forecasting tool is that it helps you automate data intake and aggregation, which is helpful for reporting.
- By automating, you can accomplish more in less time than you could before.
- Trovata lets you customize your forecasts, so you can build models faster, run more scenarios, and play with your data easily.
- Trovata AI, finance’s first generative AI tool, now offers forecasting capabilities.
- It’s impossible to find a tool that solves for all of your forecasting nuances, but, Trovata can make your forecasts better, more accurate, and less time-consuming.
Benefit 1: Automate, Automate, Automate
The first, and arguably, the biggest benefit of using Trovata for forecasting (instead of Excel), is that it helps you automate the most tedious aspects of the process.
For example, let’s say you primarily use historical transaction activity as the input for your forecast. If you were to create the forecast in Excel, you would have to download and clean up multiple bank statements.
Trovata saves you from transforming columns in each bank statement and deciding how to categorize and format each transaction, for example, for the currency or what the naming conventions might be.
You no longer have to go through this manual process for every single account for every bank that you will be using the forecast data for, every single time you create a forecast.
Now, let’s say that you’re one person, and you have to do this forecast for multiple entities, and each entity has its own banks and its own currencies, and you have to do that every week! On top of that, let’s say you want to make variations of different viewpoints of how you view this data. So, every time you create any one of those scenarios, it’s copy-paste, manage, and so on.
Makes your head hurt just reading about it, right?
Fortunately, Trovata’s open banking API technology eliminates the need to go through all of those steps since it pulls your multibank data into the platform, aggregating, consolidating, and normalizing it for you.
Benefit 2: Leverage Your Time
As you can see then, once you’ve got your banks connected to Trovata and you’ve automated parts of your forecasting process, you’ll find that the time you save gives you more leverage. This is because you can dedicate so much more time to forecasting than you would have otherwise.
As mentioned before, when you create forecasts with Excel, you have to copy and paste many things into a new sheet or a new workbook, prepare them, and then do the calculations. Not to mention, there’s also a good chance you’re creating some errors along the way since you’re doing it manually (a study by IBM found that 88% of all spreadsheets contain at least one error)!
The problem with doing all of that math by “hand” in Excel is that if you make any mistake along the way, you have to start over from zero. However, if you use Trovata, you gain leverage because what used to be complicated to do, from a math perspective, becomes easy, and dare we say it – even fun?
Let’s say that you have a year’s worth of transaction data spread across many categories and many streams. Perhaps you want to do something that seems simple on the surface, like increase all of the values by two percent and then model that out.
Then, you think that, over the course of a quarter, things will improve by two percent from a revenue perspective.
In Trovata, all you have to do to show this in your forecast is just click on a menu item, add a factor, enter in the number two, and then it does all those calculations for you automatically.
Whereas, if you had to do that yourself, you would have to go and check everything:
- Did I actually do it for every single data set?
- Did it actually pull in the data correctly?
- Does the math check out?
- Did I make any errors along the way?
- Am I modifying equations that I had put in a particular cell?
As you can see, making a slight change to your forecast in Excel turns into a whole house of cards as it gets complicated quickly. With Trovata, you get to avoid all of the uncertainty associated with manual workflows. You can make modifications and trust the output is accurate.
Which leads us to customizability…
Benefit 3: Accomplish More With Customization
We understand that, for a forecasting tool to work, it needs to be flexible and customizable for your needs, which is why Trovata’s forecasting software offers a very high degree of customization.
Without a tool like Trovata, if you know that you’re going to create a forecast, you’re ready to spend maybe two, three, or even up to four hours to get it done. Since it takes so long, you might only commit to making one, plus a variation so you can show one model of variance.
However, any more than that, you might have to commit your entire weekend to setting up all of this data for your CFO.
In Trovata, you have the ability to play winsomely with your data. You can be more flexible and customize your forecast based on how and why you plan to look at the different areas within it. Whether it’s within a stream itself or an aggregate at a forecast level, or even when you’re looking at a set of forecasts. You can also roll up your forecasts with just the click of a button.
Having that optionality naturally gives you a lot of freedom, opening the door so you can be more creative because you don’t have the burden of having to do all the work involved with an Excel spreadsheet.
Benefit 4: Jumpstart Forecasting with AI
Last but not least, with our new feature, Trovata AI, you can even leverage a large language model (LLM), like ChatGPT, for your forecasting needs.
Okay, we know what you’re thinking, “But, ChatGPT doesn’t do math!”
However, you can rest assured that the output is both accurate and private. That’s because the LLM essentially uses Trovata’s forecasting solution, so you don’t have to, but your data never leaves Trovata. It will never be shared with any third party.
You can ask Trovata AI a myriad of questions regarding your cash flow projections, such as:
- Can you forecast my cash burn for the next 30 days?
- Can you forecast the AUD exchange rate for the next 10 days?
- Can you forecast all of our cash inflows and outflows by type?
In the screenshots below, you can see what it looks like to chat with Trovata AI and ask it one of these very prompts:
To see it in action, watch this Trovata AI live stream recording where our CPO and CTO, Joseph Drambarean, gives a tour of Trovata AI.
Turbocharge Your Cash Flow Forecasting with Automation
Automated cash flow forecasting won’t solve your thorniest cash forecasting challenges or predict the future so well that it tells you the next winning Mega-Millions lottery number. However, what our cash flow forecasting system can do is help you jump higher, punch harder, and run faster than you ever could yourself, giving you leverage.
“When you get this kind of leverage, you are able to unlock creativity. And in that creativity, you will find opportunistic areas where you could make an insight where you might not have found one before because you were spending all of that time, managing the data yourself.”– Joseph Drambarean, Trovata CPO and CTO
The Trovata forecasting experience is like putting on a “Robo-suit.” It doesn’t do everything for you, but it can make you stronger and better at the job. It enhances what you’re already trying to accomplish, giving you back time. Not only that, but it allows you to run several different scenarios – not just one or two – because it’s as easy as the click of a button.
You can never have too much information when it comes to preparing for the future, especially amidst uncertainty, right?
If you’re not using Trovata’s forecasting capabilities yet, request a demo to see it in action today!