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According to IT consulting firm Hackett Group, 4 out of 5 companies are unable to forecast cash flow two to three months out and it doesn’t get any better with earnings and sales forecasts. In fact, most are still relying on spreadsheets rather than technology as their primary forecasting tool which doesn’t bode well in these times of shrinking margins, limited cash and credit, and falling revenues. Basically, most companies are flying blind in this tough economic climate.

Key Findings (based on a survey of 85 US and European companies with average revenue of over $12 billion)
·Only 22 percent can forecast mid-term operating cash flow to within 5 percent accuracy
·70 percent of companies surveyed rely on spreadsheets as their primary cash forecasting tool
·80 percent don’t set accuracy targets while 85 percent don’t set any incentives for promoting improved accuracy

What the Top Companies Do
·Top performers drive greater effectiveness by collaborating with customers and suppliers
·They look at operational indicators 40 percent more often than typical companies

Supply & Demand Chain Executive
Four out of Five Companies Can’t Forecast Cash Flow, Study Reveals
July 22, 2009
http://www.sdcexec.com/online/articl...1487&pageNum=1

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