Improve Cash, Control Costs and Protect Margins

One of the most common challenges I am hearing from business leaders right now is gaining a clear and reliable view of where cash will be in the weeks ahead, so they can act before pressure builds.

Most finance teams can explain what happened last month. The harder questions are forward-looking. Where will cash be in 13 weeks? What happens if a major customer pays late? How will a change in supplier pricing, inventory purchases, project timing, freight or foreign exchange affect the position? When does cash move below the business's safety threshold, and what action can management take before that happens?

At a time when customer payments, input costs, demand and supply-chain conditions can move quickly, a historic report or static spreadsheet is not enough. Businesses need a current view of future cash, a clear explanation of what is driving it and practical options to improve the outcome.

Cash Flow Forecasting Is Still Too Manual

Cash flow forecasting should be an interactive management tool. In too many businesses, it is still a periodic finance exercise completed to produce a report. Data is exported from the ERP, combined with information from different teams and adjusted manually. By the time the forecast is complete, customer receipts have moved, supplier commitments have changed, and the assumptions are already becoming outdated.

Common challenges I see in the market today include:

• Limited visibility beyond the immediate bank balance.
• Forecasts that depend heavily on one person or one spreadsheet.
• Difficulty connecting customer receipts, supplier payments, inventory, work in progress, projects and operating commitments.
• Forecasts that become outdated as soon as payment timing or business assumptions change.
• No quick way to test delayed payments, cost increases, customer loss, project delays, hiring decisions or capital expenditure.
• Limited understanding of why the cash position has moved from the previous forecast.
• Insights arriving after the best opportunity to act has passed.

One of the key issues today’s businesses must contend lies in the ability to convert the data easily into clear, forward-looking visibility, early warnings and practical management action.

Your ERP Is the Foundation, Not the Forecast

An ERP is designed to be the system of record. It captures transactions across finance, sales, purchasing, inventory, production, projects and operations. That foundation is critical, but the system of record does not always provide the forward-looking decision support management needs.

What businesses need now is access to the drivers behind their forecasts and the ability to identify actions that can improve end results. This can only happen when they leverage the right tools to surface the financial and operational data already available within their organisation.

Cash, Cost and Margin Are Connected

Cash management cannot be separated from the way the rest of the business operates. Procurement decisions affect inventory. Inventory affects working capital. Production and project timing affect customer billing. Supplier terms affect outflows. Pricing, cost changes and margin leakage affect how much cash the business ultimately generates.

A business can be profitable on paper and still experience significant cash pressure. That is why a useful cash forecast needs to connect finance with the operational drivers behind the numbers. When business leaders can see those connections, they can make more informed decisions about purchasing, stock, supplier payments, customer collections, hiring, capital expenditure, and growth. The result is not only a stronger cash position. It is better cost control, improved working capital, and greater protection of margin.

What Better Cash Management Looks Like with Divi

Good cash management is not simply knowing the current bank balance or reviewing an aged receivables report. It is having a reliable view of the future, knowing when pressure may emerge and having enough time to influence the outcome.

A rolling 13-week cash forecast

Divi brings together confirmed orders, expected orders, project cash timing, accounts receivable, accounts payable, sales assumptions and planned commitments to create a rolling 13-week cash position. Management can see expected inflows and outflows, the projected closing position, the impact of forecast sales and where cash may fall below an agreed safety threshold.

The forecast is refreshed as source data and assumptions change, providing a more current view than a point-in-time spreadsheet. It also makes it easier to compare the latest forecast with the previous view and explain what has moved.

Working capital visibility and recommendations

Divi identifies working capital opportunities across customers, suppliers, projects and payment cycles. This includes the drivers behind the cash conversion cycle, such as customer collection timing, supplier terms and inventory days.

Rather than simply displaying the metrics, Divi highlights practical recommendations. These could include prioritising at-risk customer receipts, improving supplier terms, deferring non-critical purchases, reducing excess or slow-moving inventory, or changing the timing of a project commitment. Performance tracking can then compare projected benefits with the actual outcomes delivered over time.

Stress testing before the risk becomes real

Within Divi, management can test how the cash position changes under different scenarios, including cost increases, delayed customer receipts, customer loss, project delays, supply-chain disruption, foreign exchange movements, new hires or capital expenditure.

Divi compares the scenario with the baseline forecast, shows the impact on cash runway and identifies when liquidity becomes critical. It then explains the underlying driver and produces recommended actions so management can assess the likely cash impact before making a decision.

Finance teams do not need another static dashboard telling them what has already happened. They need earlier warning, a clear explanation of what is driving the position and a prioritised view of what they can do about it.

A Practical Example: Seeing a Cash Risk Before It Hits

One of Divi’s customers is an Australian manufacturer and distributor with annual revenue of $75+ million. With Divi, they were able to test the effect of a sustained increase in freight costs on their 13-week cash position.

Under the baseline forecast, cash remained above the business's safety threshold. After applying the cost shock, the model showed cash falling below the threshold in week 10 and finishing approximately $1.1 million below the baseline by week 13 if no action was taken.

Divi recommended phasing or deferring non-committed expenditure, bringing forward or securing pricing on fuel-exposed purchases before further increases and rerunning the scenario as conditions changed. The projected cash position after those actions finished approximately $500,000 higher than the no-action path. The value was not simply the forecast. It was the ability to use the company's own ERP data to identify when liquidity would become critical, explain why and quantify the available options while management still had time to act.

Questions to Take to Your Next Leadership or Board Meeting

If cash management is on the agenda, I would be asking five questions:

1. Can we see our expected cash position for the next 13 weeks, including when we may fall below an agreed safety threshold?
2. Does the forecast connect customer receipts, supplier payments, inventory, projects and operating commitments?
3. Can we quickly explain what has changed from the previous forecast and what is driving the movement?
4. Can we stress-test different scenarios and understand the effect on cash runway before making a decision?
5. Can we identify the actions that will improve the outcome and track the projected benefit against the result delivered?

If the answer to any of these questions is no, Divi is your solution. You need a better way to turn the data already within your business into forward-looking insight and practical recommendations and actions.

You do not need a large transformation project to improve cash management. Divi is quick to setup and works alongside existing systems to help businesses improve cash flow forecasting, strengthen working capital visibility, test scenarios and identify the actions that can protect cash, reduce costs and improve margins.

See today how Divi can help your business Improve Cash, Control Costs and Protect Margins.