Improving cash flow: The AI advantage in financial forecasting

Every CFO knows the pressure of making high-stakes financial decisions with limited visibility. When cash flow forecasts are off, businesses scramble, relying on costly short-term loans, missing financial targets, and struggling to optimize working capital.

Yet, most forecasting tools rely on static assumptions, forcing finance teams to react rather than plan strategically.

This outdated approach leaves businesses vulnerable to financial instability. In fact, 82% of business failures are due to poor cash flow management. 

AI-powered forecasting changes that dynamic, enabling CFOs to anticipate cash flow gaps before they become financial setbacks.

The cash flow blind spot: Where forecasting falls short

Cash flow forecasting challenges cost businesses billions. Nearly 50% of invoices are paid late,  leading to cash flow gaps that force CFOs into reactive borrowing.

Without real-time visibility, finance teams struggle to anticipate cash availability, respond to fluctuations, and prevent shortfalls before they become a crisis.

Yet, many organizations still rely on manual reconciliation processes that can take weeks, pulling data from disparate sources and leaving little time for strategic decision-making. By the time reports are finalized, the information is already outdated, making it impossible to plan with confidence.

The consequence is inaccurate forecasts that lead to last-minute borrowing, unplanned interest expenses, and heightened financial risk.

Instead of proactively managing cash flow, CFOs are left scrambling to plug financial gaps.

To break this cycle, finance leaders need a smarter, more dynamic approach that moves at the speed of their business instead of relying on static reports.

How AI transforms cash flow forecasting

AI has the power to give CFOs the clarity and control they need to manage cash flow with confidence.

That’s why DataRobot developed the Cash Flow Forecasting App.

It enables finance teams to move beyond static reports to adaptive, high-precision forecasting, helping them anticipate risks and opportunities with greater confidence.

The app enables finance teams to move beyond static reports to adaptive, real-time forecasting.

By analyzing payer behaviors and cash flow patterns across SAP S/4HANA Finance and Treasury and SAP Datasphere, the app dramatically improves forecast accuracy, allowing finance leaders to:

• Anticipate cash availability
• Optimize working capital
• Reduce reliance on short-term borrowing 

With clearer visibility into future cash positions within their SAP systems, CFOs can make faster, more informed decisions that minimize financial risk and strengthen stability.

Let’s look at how a leading company leveraged AI-driven forecasting to improve financial performance.

How DataRobot is improving cash flow at King’s Hawaiian 

For Consumer Packaged Goods companies like King’s Hawaiian, cash flow forecasting plays a critical role in managing production, supplier payments, and overall financial stability. 

With sales spanning grocery chains, online platforms, and retail channels, fluctuations in cash flow can lead to significant disruptions, from production delays to strained supplier relationships, and even increased borrowing costs.

To improve forecasting accuracy and better manage working capital, King’s Hawaiian implemented DataRobot’s Cash Flow Forecasting App.

Using AI-driven insights, the company refined its forecasting process and saw measurable improvements, including:

• 20%+ reduction in interest expenses. More accurate forecasting reduced reliance on last-minute borrowing, lowering overall financing costs.
  

• Improved cash flow visibility. Finance teams had a clearer view of cash reserves, allowing for better short-term planning and decision-making.

• Operational stability. With better forecasting, the company was able to prevent funding gaps that could disrupt production and distribution.

More precise cash flow predictions helped King’s Hawaiian reduce financial uncertainty and improve short-term planning, enabling the finance team to make more informed decisions without relying on reactive borrowing.

Getting an edge with adaptive, AI-driven forecasting

Traditional forecasting tools rely on rigid assumptions. AI-driven forecasting learns from actual payer behavior, continuously refining predictions based on real-time SAP data.

This approach improves forecasting precision down to the invoice level, helping CFOs anticipate cash flow trends with greater accuracy.

AI-driven forecasting helps your team:

• Reduce payment risks. Identify potential late or early payments before they impact cash flow.
  
  
• Eliminate billing blind spots. Compare forecasts to actuals to spot discrepancies early.
  
  
• Optimize inflows. Gain real-time visibility into expected cash movement.
  
  
• Lower short-term borrowing. Reduce reliance on last-minute loans by improving forecast accuracy.
  
  
• Control free cash flow. Adjust spending dynamically based on predicted cash availability.
  

The Cash Flow Forecasting App integrates directly with systems like S/4HANA Finance, S/4HANA Treasury, SAP S/4HANA Cloud for Cash Management, SAP Datasphere, and SAP Analytics Cloud to eliminate manual reconciliation and support more accurate, forward-looking decisions.

Good CFOs plan. Great CFOs use AI.

To transition from reactive to proactive financial operations, businesses must embrace AI-driven forecasting.

With advanced AI integrated into their SAP environments, CFOs gain the ability to predict cash flow gaps, optimize working capital, and make faster, more precise financial decisions, all of which drive greater financial stability, security, and efficiency.

Take control of your cash flow management and improve forecasting, book a personalized demo with our experts today.