75% of MNCs Lack Confidence in Own Cashflow Forecasting

Three quarters (75 per cent) of multi-national corporations admit to having little or no confidence in the accuracy of their own cash flow forecasts, according to research conducted by REL Consultancy Group in conjunction with GTNews. Two thirds of respondents believe problems with forecasting are due to a lack of systems integration across business units; over half blame poor internal communications. Poor sales projections and collections policies were also cited with almost half of treasurers responding saying that problems in pricing, billing and logistics lead to poor cash collections from customers. Commenting on the research Alexander Bielenberg, Director of REL said: ‘It is alarming that cashflow forecasting – the most reliable indicator of corporate health – still plays second fiddle to profit predictions. You can report losses year after year but you only run out of cash once!’ The survey of 250 multi-national corporations requested answers to a range of questions on forecasting and general collections processes and practices.


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