Many treasury software vendors strive to offer reliable and efficient modules to anticipate cash inflows and outflows. In addition to Treasury Management System tools, stand-alone solutions for managing and optimizing WCR are being developed. These niche solutions are designed to improve the management of the purchasing cycle (P2P) or sales cycle (O2C). Overview.

Many treasury software vendors, such as Kyriba, Diapason, Bellin, Sage and ACA, strive to offer reliable and efficient modules to anticipate cash inflows and outflows. One vendor, CashForce, has gone a step further by making cash flow forecasting and working capital requirement (WCR) the two pillars of its solution.

This offer is available alongside other services that focus solely on Order to Cash (O2C), Procure to Pay (P2P) or cash forecasting such as those provided by CashNow and CashLab. For Aymeric Dupas, Head of Marketing & Sales at Aston iTF, “Mid and large companies alike are facing two challenges: they need to innovate digitally to remain competitive, and they need to find the cash to finance this transformation. Working capital optimization and cash culture play a strategic role in achieving these goals.

In addition to Treasury Management System tools, stand-alone solutions for managing and optimizing WCR are being developed. These niche solutions are designed to improve the management of the purchasing cycle (P2P) or sales cycle (O2C). They are part of a management chain that begins with the act of buying or selling and ends with payment or collection, ultimately at the Treasury and Financing Department level.

C2FO is one company involved in P2P. This publisher has developed a discount platform that enables suppliers to be paid more quickly by their main customers at attractive rates. The approach is collaborative and dynamic: buyers upload their approved supplier invoices to the tool, set a target rate of return and provide information on their available cash flow. Suppliers, in turn, offer a discount rate in exchange for early payment of invoices. Based on all this information, the platform aligns proposals by determining a mutually beneficial rate for cash flow optimization.

Some stakeholders involved in the digitization of outgoing invoices have also taken up P2P optimization. They aim to expand their offering and move up from the purchasing department to the finance department. This is true of, for example, Ariba and Basware, a Finnish company created in 1985. “One of the major challenges in optimizing working capital is to improve the invoicing process. By eliminating paper invoices and replacing them with a purchase-to-pay process, the finance department’s operational costs are not only reduced but, more importantly, it is possible to collect discounts on payments more quickly. In addition, paperless solutions provide companies with more accurate cash flow forecasts,” explains Nicolas Gudin, Director of Basware France.

O2C has also seen some major technological innovations. For some years, SideTrade has been offering solutions that make it possible to view the main financial indicators of the customer cycle (such as aging balance, DSO, outstanding claims and due rates) in real time. Another provider, Aston iTF, offers a platform designed to simplify collection recovery, customer risk management and the factoring of trade receivables. “Companies are asking us to automate the cash collection process to speed it up, analyze performance and anticipate customer risk. Big Data and AI make it possible to intelligently automate tasks, provide real-time business dashboards at all business levels and analyze customer payment behavior to adjust recovery accordingly,” explains Aymeric Dupas. According to Aston iTF, it is possible to reduce manual tasks by 60–80% and reduce collection times by more than 20%.

The significant increase in technological offerings linked to WCR management and the resulting competition means that a company wishing to digitize its WCR management must define its needs well in advance. In addition to the usual constraints, such as cost, schedule and the need for a dedicated internal team, this type of project requires particular attention because of the number of stakeholders working together throughout the customer and supply chain – purchasing departments, information systems, accounting, treasury, credit management and the like – as they may have conflicting interests.

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