The ‘new normal’ is characterized by continuous rethinking: In order to make differentiated decisions, CFOs today not only need valid key corporate figures from the past, but also innovative methods for reliable forecasts.
And that’s not all: it is often necessary to simulate various conceivable scenarios and their respective effects in order to lay a foundation for discussions and decisions. A task that is often complicated and anything but resource-efficient.
Valsight’s Slider now makes what-if simulations easier: the Slider simulates the effects of changing conditions in real time. Thus, new assumptions in an existing scenario are intuitively visualized and can be used as a basis for decision-making. How does that work? We present you an exemplary use case.
What-If Simulations in Real-Time: “Liquidity Planning” Use Case
The scenario: liquidity bottlenecks due to delayed customer payments
The e-commerce company Examplio GmbH has been observing payment delays among its customers for several weeks. The CFO wants to understand how this development affects the company’s liquidity and is also looking for the best way to transparently communicate the results internally. Even in the past, he hardly had time for extensive manual Excel evaluations before last-minute meetings.
The approach: Value-driver-based what-if simulation with Valsight
Recently, the CFO has started to use a value-driver-based planning approach: He uses existing company key figures to simulate the effects of new assumptions and incorporate them into the company’s management. To prepare for the meeting with the CEO, he opens the scenario manager in Valsight, updates the data, and experiments with new assumptions. He would like to show the seriousness of the situation and derive recommendations for further planning.
A look into the future: real-time forecasts with the new slider
In the meeting, he changes the slider delay of the incoming payment and it quickly becomes clear to everyone in the meeting how the persistent late payment will affect the future liquidity of the company. This allows the CFO to visualize how long the company will remain liquid under current conditions. Various scenarios are discussed: What if payment delays were passed on to suppliers? How many weeks could the company gain? Does a bridging loan provide relief?
Using the tool, the CFO evaluates the proposals and makes initial forecasts. When asked how long Examplio GmbH would remain liquid under the current conditions, he responded with a meaningful simulation. On this basis for discussion, management can develop concrete measures for the future and make well-informed decisions.
Processes of enterprise performance management With the slider, they not only analyze sales growth, but also other issues:
With this new feature in Valsight, CFOs develop reliable forecasts for the future. They intuitively understand how changing conditions affect the business and get a sense of their data. This facilitates decision-making and supports enterprise performance management processes. With the slider, they not only analyze sales growth, but also other issues:
- Project duration
- Number of employees
- Currency ratio
- Market growth
In unserem Video sehen Sie, wie Sie den Slider für Ihr Szenario einsetzen können: