“Cash management is a critical function for any business, involving managing cash flow to meet financial obligations, invest in growth, and succeed in the long-term. Effective cash management is vital to maintaining financial stability and avoiding cash flow problems that can negatively impact the business. It also enables businesses to free up cash for investment and growth, which can help them stay competitive and increase profitability.
Cash management can also help businesses manage financial risk and avoid taking on too much debt, as well as build stronger relationships with suppliers and other stakeholders. By paying suppliers and creditors on time, businesses can build trust and credibility, leading to more favorable pricing and better access to credit and financing.
Finally, by setting clear financial objectives and developing a cash management plan, businesses can stay focused and on track towards achieving their long-term financial goals. Effective cash management is crucial for any business, regardless of size or industry, to position themselves for success, even in challenging economic conditions.”
For those not yet familiar with this new tool of AI (Artificial Intelligence) I downloaded the free (for now) ChatGPT app and gave it a simple task: Write 300 words on the importance of cash management to business owners. While ChatGPT apparently can’t count very well – the result was 166 words long, not 300 – it got the logic of the question accurately and pretty well defined the key reasons why cash management is important to business owners. In several tests run by an associate during a group meeting earlier this week, it responded to several requests to write marketing letters or legal opinions, and responded in less than a minute to each request. In every case, as in my example, the logic was sound, the opinions well stated, and the conclusions reasonable. And at no time did a human being touch the requested response before it was delivered.
Think about that for a moment. A computer algorithm using its access to the internet to create a plausible chunk of text that looks like it was written by a financial consultant. What if it were represented as actually being written by someone you know? What if it came with instructions to send money, or pay the bill, or vote for a make-believe candidate? How will you know that it wasn’t written by your accountant, your banker, or your grandmother? How will you know if your kids earned that A or if they simply copied and pasted an AI response?
The power of evolving technology is – as we have long recognized – both a friend and a fiend. It gives us the opportunity to be much more productive, or to be duped into making a serious error in judgment. The need for awareness when we open our laptops has never been greater. Something to think about. Why do we think about these kinds of things? Because…
We are Your CFO for Rent.