Tracey Ferguson Knight

Tracey Ferguson Knight

Director, Solution Engineering
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Tracey Ferguson Knight , who is the Director - Solution Engineering at HighRadius With over 25 years of treasury experience, she has helped hundreds of companies select and implement technology to transform their treasury departments.
Peter Seward

Peter Seward

AVP, Product Strategy, Treasury
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Peter Seward, AVP Product Strategy Treasury is a very experienced Senior Product Management Leader in SaaS financial technology specializing in strategy, thought leadership, execution and go to market.

Session Summary:

Takeaway 1:
Why Cash Forecasting is a top area to automate using technology
Key Points
  • Top surveys state Cash Forecasting is the top treasury priority among corporates
  • The need for cash forecasting has exacerbated since the pandemic
  • With the increase in priority of cash forecasting, the adoption of treasury technology is also increasing
  • In spite of this, most companies use Excel for Cash Forecasting, even when they have a TMS
Takeaway 2:
What the value that is provided by Cash Forecasting and Cash Management model for treasury professionals
Key Points
  • Build forecasts directly instead of relying on indirect FP&A forecasts
  • Have global cash visibility across regions, currencies and cash flow categories
  • Build state of the art models using Artificial Intelligence to generate accurate forecasts
Takeaway 3:
The new features of using HighRadius Cash Forecasting and Cloud Management cloud
Key Points
  • Have flexibility to build your own formulae and models no top of the data gathered
  • Collaborate with your treasury peers using dashboards and analytics with connected workspaces
  • Perform transactions such as inter-bank and inter-company transfers using drag and drop
Tracey Ferguson Knight : 0:01

All right, so we’re here to talk about the future of AI and what we’re doing here in the Treasury.
So we’ll talk about why cash forecasting, you know why we moved into this area, we’ve been known for order to cash for a long time, what changed? Talk about what it is that we’re offering, you’ve already heard a little bit from Bryan talking about cash management and cash forecasting. So we’ll discuss what we’ve got right now. And what we’re doing and coming up here with some major releases on both cash forecasting and cash management. And then of course, take your questions. As you’ve already heard, we’ve got a demonstration set up there, out in the concourse where you can see the system live for yourself, as well as set up a more in depth meeting if you’d like to get into more details. So with that in mind, why did we get into cash forecasting, you know, how is HighRadius prepared to really move into this area? Well, we saw a number of different things. In our order to cash modules, we’d already been doing some forecasting for a long time within the collections module. But at the very same time, we’ve been doing this over the years, we’ve been seeing that cash forecasting has been rising in Priority among corporates, on just about every survey that you look at these results for from Treasury strategies. But if you look at surveys from PwC or Deloitte or almost any place, you’ll see that cash forecasting has been rising to the top of the pandemic. So now, after the pandemic, if there is less than one, that’s where it would be now the highest level of importance for sure. Now, at the same time that cash forecasting is in rising importance, adoption of Treasury technology has continued to increase. More and more companies have treasury management systems, or perhaps are using an ERP, to manage a lot of different Treasury functions. Yet, if you talk to companies, even if they have that, the cash forecasting module of a TMS, they’re still using Excel. So it might be Excel and the TMS. But Excel is almost always in use. We really saw this as an opportunity. As I mentioned, we’d already been forecasting within our collections module for years. So it’s really a natural transition, to begin to take some of this expertise that we’d already gained right into the Treasury space, just expanding the categories beyond just to AR but to AP and payroll and taxes so that we can cover all of the different categories that might have in your direct cash forecast.
So what is it that we’re offering? Right now, we’ve got two modules, cash management, and cash forecasting. Cash forecasting, as you heard from Bryan, and we’ll be talking about today is all about building that direct cash forecasts, giving your company a different view than they might have from FP&A. You know, FP&A is that indirect forecast, but it doesn’t always really predict what money you really have in the bank. And when is it expected. However with our cash management module, we can also give you global cash visibility of what money you really have, where it is, what currency, all the details you need around that cash information. So let’s go a little bit deeper into those.
Now, with cash forecasting, there are a number of challenges that most companies are facing, and their challenges all along throughout the process. The first has to do with data. Do you have a way of getting large amounts of data managing those large amounts of data, cleaning and analyzing those large amounts of data and managing it. And then modeling that data. Most us Treasury professionals or even finance professionals? You know a lot about Excel. But are you a mathematician? Are you a data scientist? Can you really build the best models yourself? More than likely not. And so what we hear from a lot of companies is that they’re doing things in very basic ways, taking maybe the average over the last couple of months, maybe just using the same number that happened last year, using that for this day on in the future, and just taking some very basic approaches. And even when companies try to get more sophisticated with their modeling, they’re able to do so but usually kind of max out in the amount of accuracy they’re able to get. So companies are suffering in accuracy. They’re spending too much time and effort in the process, and oftentimes getting poor results.
So with our system in the very current version that we have right now, the one that you can see demoed out on the demonstrations. We’ve got a version of our system that will take information from a variety of different sources. Now we help with that integration whether they be automatic extractors. Or if you don’t want some kind of automatic integration with your systems, maybe with some manual uploads, connecting with your banks via API or bringing in BAI files, whatever is most appropriate for you. But we’ll take all the data from the appropriate sources, bring them into our system will come into our models, which will predict out into the future, your forecast, you’ll be able to see it by entity as well as consolidate it globally. So these are auto generated and regenerated as often as necessary, with variance analysis. So you can see how your forecast is performing. So that’s available right now in our current version. And as you’ve heard, our customers are getting great success, we have many seeing significant increases in their accuracy around A/R and A/P. For those that are putting in lots of time and effort into the process, they’re seeing some savings in the amount of time that’s required. Not always trying to get rid of a course or headcount, Treasury never has extra people around. But if you can save some time, that time can be reallocated to something else. we’re generating longer forecasts. Many companies are telling us that they’re only able to produce a forecast for maybe two or three weeks accurately. But yet with our system, they’re able to go out much further. You heard Bryan speak about that already. And of course, automated variance analysis. So there’s many benefits and successes that our customers are seeing. Peter?

Peter Seward:6:36

Thanks, Tracy. So in the couple of years that we’ve had our modules out there, we’ve learned a lot with our clients. And looking at the left-hand side, on the right-hand side, you can see, firstly, there’s a lot of data that needs to get into the system from a lot of sources. And it’s a very large amount of data. So we’re talking about hundreds of 1000s of millions of historical invoices that you might need to load. Okay, so I asked a question earlier of Bryan, you know, what did he attribute his success to, either better modeling or cleaning up the data. So you know, just cleaning up data, making sure that it’s accurate, categorized correctly, etc, is going to improve results, even with the same models that you might be using now. Okay, so the ability to kind of look at, analyze it , correct it, etc, is almost as important as the type of models that you use. But anyway, when you’ve got large amounts of data, and on the right-hand side, you’ve got many users. So Tracy talked about FP&A and Treasury is set up differently, sometimes you have a P&A group separate, you have a business services group separate. finance separate, and then some, many companies have dedicated Treasury departments. So everyone wants to use forecasting. So the actual forecasting is not a like a standard thing. So Tracy mentioned direct indirect forecasting, three-month forecasting, he annual budgeting forecasting, there’s a lot of different uses of forecasting. So the couple of big things we’ve learned over the last couple of years is, it would be great if we could give our clients the ability to do more work with their data, clean it up, not be constrained with our data science team and the models they give them. Some clients may have very simple models that they want to calculate historical averages, that is outstanding, etc. and then apply some formulas that Excel like formulas to large amounts of data, in addition to use very complicated AI models. So flexibility, analyzing the data, flexibility in manipulating it. And then flexibility and presenting it out are the three big things that we’ve discovered over the last couple of years. So we want to be spending a lot of time and effort to improve those. Okay, and so that’s highlighted by the green areas and in the center there. So we’re going to give clients the ability to load up their data, hundreds upon 1000s of invoices into what’s really like Excel worksheets that can contain very large amounts of data. So you probably where there’s limitations in Excel, but there are databases around these days that allow you to load up millions of records, okay, then you’ll be able to analyze them, graph them. So categorize your historical invoices by customer amounts, whatever you like currency, and then get graphical kind of results on that. Then you’ll be able to create your own formulas and make your own formula driven models that you may want to use. Instead of our AI models. You can still use our AI models behind the scenes for the more important categories like AP and AR. But for other items like Bryan talked about, you can you build your own models, then you can bring it all together in one forecast worksheet like a high sheet and you’ll have the ability to enter your own data importer, use our formulas, create your own formulas using our AI, data science models, so a lot more flexibility in how you can create the numbers in your forecasts. So that’s the major thing that we’re working on. Then, in our reporting with our variants to cards, or the dashboards that Bryan showed, we’re going to make that available and support that further. So in terms of the features, we’re gonna make it a lot easier to get data into the system. So the six to nine months that Bryan was talking about should come down dramatically a lot easier for our consulting team to deploy a lot easier for clients to deploy, you’ll be able to choose between how you calculate data through your own formulas, Excel like or our AI models. And we’ll be utilizing the clouds and the backend, we’re using a lot of modern databases. I’m not sure whether many of you have heard of snowflake as a database, I think their West Coast company, but there’s, there’s new databases, new technical things behind the scenes that allow very big data sets to be managed in SAAS software these times. Okay, so actual versus expected, up off to compare that we’ll have new types of forecasts. So Bryan talked about rolling forecasts, one week drops off for one week, one month drops off, at the end of every cycle, you’ll be able to create budget forecasts, and then compare actual versus expected. So fixed period budgeting will be off to share, you’ll be able to export all your data. And we will have all the data, what we call collaborative workspaces, meaning a lot of users can access the data at one time and work on it.
Okay , so it’s not not going to be a black box, it’s going to be very much like Google sheets or whatever, where you can have many people working on it, instantaneously save versions, etc. Okay, so a couple of mock ups of screens here. So this is similar dashboards that you’re looking at cash position, cash balances, this is AP and AR, and then a net amount. So the look and feel will slightly change and a lot more like the classic IR in integrative receivables application.
And in terms of timing, we are working on both cash management and cash forecasting. We’re a little bit advanced with cash management. I’ll talk about the functionality in a second. But we will be releasing that in October, were busily testing We’re almost finished all our coatings and doing what we want to make enhancements. So we’re just trying to break it and make sure it works its production level. And in November, we will be implementing our releasing our new cash forecasting module. Okay!

Tracey Ferguson Knight :13:05

So within cash management, cash management typically addresses a number of different areas for customers. And for companies that are challenged with bank integration with setting a good cash position and doing it quickly and easily with seeing their cash globally, particularly when you’ve got multiple banks all around the world, often in different currencies, sometimes challenged with automated reconciliation, that process of reconciling that cash position to what really happened at the bank and understanding the differences. And then tracking intercompany balances and pooling. So our system is designed to address that. And we’re addressing all of these different areas. Now right now, in our current version, I would say it’s mostly giving you global cash visibility with a little bit of cash positioning. But with our next version, we’re making major advances in these areas. Peter, you want to talk a little bit about this upcoming version?

Peter Seward : 14:02

Sure. So yes, we’re extending our functionality, quite a deal in cash management. So in forecasting, we’ve always needed the ability to pull in actuals and bank balances, but in cash management, it’s far more orientated towards today, tomorrow, the next day, okay! What’s in my account? And what, how much cash will I have at the end of the day? Okay. So I’m very much interested in bank accounts and not so much interested in bank accounts and forecasts, because I need to know what’s in each particular account. Because if I’ve got to move money, concentrated across banks, and then invested etc, or borrow, I need to be able to see all that and do that. And, and so that’s what we’re enhancing. So we’ve always had the ability to pull in bank files, the what we’ve enhanced that is the we’re going to do an automated Friday reconciliation. So you’ll be able to set up matching rules or tagging rules where you identify your cash items, and what rules you search on your bank files to match them off and auto reconcile. So one to one all the way through to many to many very sophisticated and automated. And then you just exception manage and just look at the differences, the unreconciled items, and then you match them up, create cash items, etc. and reconcile so much more structure around that cash position. So we’ll have a dedicated cash position worksheet, which allows you to configure it separately to the UI, the way you do your forecast. So a lot of people look at their forecast differently, maybe by P&L item. And when the cash position, I’m far more interested in breaking in breaking out Treasury and non Treasury and the like, types of activity. So you’ll be off to kind of configure both screens differently than do lots of nice things like drag and drop, drag money from one account to another account, and then we’ll move it there, do your own clearing. So a lot of people have ZBA poles in one bank. But if you want to have a interbank clearing, you actually have to do wires for that. So we’ll have the ability to kind of drag clear from multiple banks into one master account, automatically, and the system will just do it for you respect target balances, and minimum transfer amounts, etc. So a lot more sophistication around cash management will track into company balances. So if you’re sweeping across companies, and you need to track the balance, maybe charge interest on intercompany balances, you’ll be able to do that as well. So hopefully you get the idea. We’re moving more into the cash management. And over time, we’ll be adding more around bank account management, etc. We’re talking with partners about the ability to create payments, do bank fee analysis, etc. So we’re moving towards that direction. So in terms of features, we’ve always had the ability to integrate with banks, either flat files or API for getting actual. So we just leverage all that functionality, you’ll be able to see all your bank positions multi currency, we have to view it in any currency, multi company multi bank etc, will automatically be able to categorize our bank transactions, as well as our forecast our actuals into cash flow categories. Automate the reconciliation of prior days pulling current activity, you’ll have like a designer for the cash position. So you’ll have multiple views. So you can look at pools, concentrations, banks, regions, companies, etc. Organize your accounts however you like. And lastly, manage intercompany balances. So a snake kind of peek at our new cash position. So here you’re seeing a cash position by time so for the next five or seven days, nice highlighter, you know, colors of negative numbers, etc. Then on the left hand side, you see the currency and then the cash flow categories, and then the accounts of opening balances, and then all the movements and at the bottom will be kind of, you know, what’s your position at the end of the day.

Tracey Ferguson Knight : 18:10

So Peter , here we are getting the hook here from Madeline, if she had the big giant hook, she’d already pulled it. Time is just about up. I think we want to end by talking about the fact that we are growing, we are investing heavily here in our products. He talked not only about these upcoming releases and our continued investment in cash management and cash forecasting, even with cash management with signers and tracking of your bank accounts coming up, but in 2022, financial instruments, so tracking of your investment and your debt and your credit lines, we are growing. So continue to look at what we’ve got right now, know that it’s going to continue and change to grow to cover your entire Treasury business. So at this time, we’re ready to take your questions.

Questioner 1 :

Thanks, Tracy. Peter. Just a quick question, can you share with us a profile of the typical clients that you provide consulting service?

Tracey Ferguson Knight :

Profiles typical profile clients is that which is that? I think there is no particular I talk too loud already. No particular industry that this is ideal for cash forecasting we find works well for just about any company that needs to produce a direct cash forecast will be a good fit for regardless of whether or not you have any other kind of Treasury technology. already in existence. So we have some clients that already have a treasury management system, others that don’t. Now on the cash management front, we’ll find that it’s a good place for companies that are coming off of spreadsheets, wanting to begin to automate that process of cash positioning, reconciliation and having that global cash visibility. So usually, when you have, you know, you heard Bryan say, he’s just one bank. But having that ability to see it automatically all the time, is the benefit in and of itself. If you’ve got many banks, many currencies, I think the benefit just grows exponentially. So I really think it’s a kind of a good fit for just about every company at this point, I think just about every company is beyond basic spreadsheets now. And having technology just to begin to automate the process. There’s not always an ROI for that. But there’s a benefit and just having this base level of information, always available to you all the time. And then if you actually end up saving some time, seeing better accuracy, making better investments, better debt decisions, all of those things begin to add on some ROI, where previously maybe there was none. Does that make sense?Okay.

Questioner 2 :

On the forecasting side, is the system able to handle like exceptional events?

Tracey Ferguson Knight :

Yes, there is the ability to do what we call manual overrides. And that just means that for one off events, things that are not recurring things that there’s no way the system could ever have known about, you can put in your own information. So if it’s an acquisition at the best share, some kind of special pay out, anything that is kind of one off and has not been occurring in the past, it won’t be in the forecast, you can add it in. Now, even for rare events that are recurring. Those are included in the model, we’re starting off with about two to three years of your historical data. So even things that are pretty irregular, like payrolls or special, even quarterly dividends, those are already there. So you’re really looking for one off things that the system couldn’t know about. Yes?

Questioner 3 :

Does your system support globally? Other banks? I mean, banks around the world? And do you have implementation partners around the world?

Peter Seward :

Yes, so our bank found the ability to bring in bank files, support Swift or BII, and came to all the major global standard CSVs and API. There, you’ll find some regional formats in say, France or Germany that we don’t yet support, but it’s something that we would add straight away. Does that answer your question?

Questioner 4 :

First of all, thank you for the presentation. Great presentation. You mentioned that your current management system, it’s bank integrated, does this mean that we no longer have to log into our banks, we can just log in into our Treasury system, and we’ll be able to like to process payments through that or do we still have to actually log in through our bank portal.

Tracey Ferguson Knight :

So I think what you log into the bank for changes, you will still need your bank portal, you know, you do lots of different things in your bank portal. But on a daily basis, whether it be previous day files, or even intraday files, those will automatically come into the system, you won’t need to log in for that, you will still be logging in for things like payments right now, although we will add a payments module in 2022 as well. You log in for your positive pay for all those other things that you do in your portal. But when it comes to just looking for your bank data that we’ll have covered.
Any other questions? Yes.

Questioner 5 :[Inaudible]

Tracey Ferguson Knight:

So those are things that we will be able to do with this next release. We’ve got lots of added flexibility. Previously, I avoided any company that said that they needed commodity pricing included in kind of the forecast, but with the flexibility that we’re adding with this new release, I think we’re excited to see to what limits we can push and including lots of additional data sources like commodity pricing and things like that. It’s something that we should be able to handle. I won’t say that we’ve already done it, but we’d love the opportunity to try. And as you heard Bryan say, we’re willing to even do some creative things to make sure that we are trying it out in a way that won’t be of any risk to you monetarily. So if you want to give us a try, we’d love to try it out even on a small scale.

Tracey Ferguson Knight :

Alright, if there are no more questions at this moment, once again, I invite you to come see a demo, maybe set up a meeting where we can talk about your specific situation. We’d love to deal with it and talk with you more. We’re excited.

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