Inspiration & Problem Statement
We were considering the reasons as to why smaller companies usually face the issue of capital mismanagement, and we concluded that it was due to two main underlying reasons. The issue of a typical lack of on-hand capital due to delayed client payments can broken down and attributed to:
- Lack of real-time information for the financial executives to have clarity on the business financial/pecuniary state to make swift business decisions when it matters.
- Lack of efficient tools that enables the financial department to parse the incoming information quickly enough for the insights to be relevant. Also, current tools can possibly be enhanced with financial projections and predict risks effectively.
What is our solution to this problem?
To create an integrated platform (Web + Mobile) built together with a machine learning trained model to provide real-time insights from the business' financials for all financial executives at all times. This system will be integrated across a web console and mobile application for portable access.
Our application dashboard, whose primary purpose is to display analytics, will take the form of an easy to comprehend graphical interface. Using _ principles of design _, like size and weight, crucial metrics like cash-flow and its sources will be brought into focus.
Who will benefit from our system?
We plan for our system to have both a web console and a mobile application. The web console can be managed primarily by the finance department, while the mobile application will be more like a portable 'pocket-sized', business financial dictionary for the executive.
- Finance Department The finance departments will be the ones in charge of keeping a close eye on the state of financials, making adjustments to inputs and necessary parameters for the business financials forecasting model to generate the more meaningful results.
The web console is where the initial business financial numbers are input, with data analytics tools that can be modified for accurate analysis, and also a machine learning based model to help with projecting business financials across a certain time period.
Assuming a use case for an incipient company with only a few years of financial statements, the forecasting model is the highlight of our system. This can be labelled as the Business Financials Forecast Section in the system. Taking in data from real-time transactions carried out, the model will consistently calculate and churn out the likely result of business financials are any point in time using probability models.
- Upper-Level Business Executives
Why is this so important? Executives are often all over the place, meeting with different clients. At a particular point in time, it is difficult to get everyone to have the same level of clarity on the business financials at all times. And yet the best business deals can sometimes come at the most unexpected moments.
For smaller companies, making a business decision on the spot can sometimes make or break the company. Our mobile application help to reduce the time delay executives face if they wish to have a clear overview of the company's financials. Using the mobile application, they can extract simple financial figures of the company, or calculate simple metrics from those figures at any time. This can reduce the friction and time delays significantly, as compared to the alternative of consulting the finance department for those insights.
Our system is also collaborative, facilitating the scenario where all business executives are on the same page, promoting transparency. While the finance department maintains the foundation of the analytics and forecasting system, the executives will also reap benefits from the seeds the department have sowed. Using the forecasting model, anyone who plans on making a financial decision can make a more informed decision. and empower them to make more informed decisions by gleaning insights from numbers, without having any expertise of being a data scientist.
The executives will input parameters like their expected expenses and expected revenue gains/ incoming client payments. The system will make the necessary calculations to predict the state of the business' cash flow at any time in the future. This will empower the system to warn users if anyone was planning on making a financial decision/deal that will threaten the livelihood of the business.
How we built it
We plan on using python libraries, to set up the data analytic tools for the web console and also to train a machine learning model that will forecast the company's cash-flow state, and subsequently other financial metrics like EBITDA and Net Income based on the input parameters.
Linking back to the challenge statement
How does this help to optimize working capital?
By incorporating a forecasting machine learning model controlled by the finance department, along with a business financials digital pocketbook, this can aid executives in swift and informed business decisions to set the boundaries for, and secure better deals, that will not jeopardize the livelihood or health of the business. Information is the best tool to help facilitate appropriate decisions that will improve the management of working capital and augment current business strategies.
We understand that it is hard to come up with a system that can suit the diversity of company types out there. The graphical interface, together will its user experience can be sort of a universal language for all companies. However, we are open to explore the possibility of creating a system where the financial metrics display in the web console or mobile application can be customized. Or that we can create multiple display templates to suit different company types.