AI-driven cash management solutions


AI has been revolutionary for almost every single process and technology. So it has been for the cash management processes, and for the forecasting as well. Various modern technologies, such as ML (Machine Learning), RPA (Robotic Process Automation), and Deep Learning have been implemented into the cash management processes. What are the results? In most cases (fortunately) we can see higher productivity and enhanced profitability.

The history shows us that the reporting, payables, and receivables need some time to perform the processes (although they are routinized and predictable), manage the disputes and exceptions, as well as identify the risks. With AI, all this could be enhanced – we mean that it could become both more effective and quicker. Moreover, Advanced Statistical Modeling, Data Mining, and ML, could be used in the processes of predictive analysis. The forecasts could now become even more accurate, and thus the decisions could become simply better.

The new solutions could be valuable for small and medium-sized enterprises

There is something vital in the new possible cash management processes, especially for organizations wanting to have this sustainability and long-term business profitability. The size of the endeavor does not really matter. Instead of paying everything at the same time, the SMEs are usually implementing the tactics such as spreading out the payments. This allows them to avoid spending everything and draining their income. This would leave the business vulnerable to different disruptions, also called the ‘unexpected expenses’, and no business owner wants that. The customers could be incented with more ease by regular package deals, online payment options, discounts, and more.

The SMEs have to be planning the shortages of cash. Usually this means keeping the cash needed for even up to six months of regular operating, so that businesses can prepare for unexpected periods of low income or some emergencies. Despite all the solutions that the SMEs’ managers come up with, the cash management is still a hurdle for them.

The study reveals the truth

The study presented by Preferred CFO shows us, that 82% of businesses actually fail because of the inadequate management of cash flow. The data shows, that a further 79% of business owners believe that starting with too small of a capital is the reason for failure, and 73% claim that they were too optimistic when it came to estimating the achievable sales as well as the investment required for that.

Not to mention the pressure on SMEs that has been present in the past year. Not many managed to keep the positive cash flow, as the pandemic and lockdowns simply blocked most of the possibilities and completely disturbed the normality.

As we are now emerging from the pandemic, the small and medium sized businesses are actually looking for some further ways to enhance their flow of money and payment decisions. Tailored help and customer support from the AI-driven financial services would only be an asset. The analytical tools (as we established, are more precise) will also help them prepare for anything unexpected.

But let’s keep it in mind that the smaller businesses are still limited when it comes to the accessibility of the cash management solutions. According to the estimations, only a fourth of SMEs actually has a treasury function, as the rest relies more on the solutions provided by spreadsheet software. The problem is that they are not designed to help businesses deal with financial risk and cash management.

Commerzbank also conducted some very interesting study which shows that SMEs are finally realizing how important for them are the solutions that help them manage the cash flow. Out of those, which have decided to implement such, 70% are using pieces of software offered by their banks, 26% use software from outside developers, and only 4% decided to develop a solution on their own.

To read more about the topic of AI-driven solutions for SMEs, use the following link, and access the Disruption Banking website where you’ll find Tal Sharon’s piece: