# Analysis-Cocoa rally and market tumult hoist systematic hedge funds ahead of their peers
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-18
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Cocoa Rally Boosts Systematic Hedge Funds Amid Market
Meta Description: Discover how systematic hedge funds outperformed peers in Q1 2024 due to cocoa rally and market turmoil. Gain insight into the strategies used and the key fact
URL: https://financedigest.com/analysis-cocoa-rally-and-market-tumult-hoist-systematic-hedge-funds-ahead-of-their-peers-2html

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_Must-have tips for capitalising on operational data_

By **Dafydd Llewellyn _,_** _EMEA GM,_ [_insightsoftware_](https://insightsoftware.com/)

COVID-19 changed the modern finance team, as finance professionals adjusted their lives and the way they work together. With the effects of the pandemic continuing to linger, companies are still adapting; however, one of the more notable and specific changes for finance teams includes re-thinking the basics of operational finance.

[Operational finance](https://www.financedigest.com/synapse-appoints-new-finance-and-operations-manager-to-support-the-rapid-growth-of-the-business.html "Synapse appoints new Finance and Operations Manager to support the rapid growth of the business") incorporates the indispensable roles and responsibilities inherently connected to consolidation, procure-to-pay, cash, close, reporting, and fixed assets. Pre-pandemic, companies managed these tasks reasonably well; however, businesses are now plagued with unexpected complications and difficulties, primarily because of [remote working](https://www.financedigest.com/remote-working-tips-to-help-it-last-longer.html "Remote working tips to help IT last longer") and accessing historic, on-premise data.

As a result, there is a need for [finance teams to streamline their workflows and leverage analytics](https://www.financedigest.com/data-analytics-scenario-planning-and-the-finance-department.html "Data analytics, scenario planning, and the finance department") as part of their day-to-day operations. Furthermore, due to the pandemic, there’s a [higher demand for more complicated forecasts](https://www.financedigest.com/boes-saunders-worries-inflation-will-be-higher-than-forecasts.html "BoE’s Saunders worries inflation will be higher than forecasts").

To avoid issues, [finance teams are dealing with data and workflows in new ways](https://www.financedigest.com/6-ways-to-finance-your-dream-vacation.html "6 Ways to Finance Your Dream Vacation"), as well as where and how operational data and analytics fit into the planning process. Here are three tips to help [finance teams](https://www.financedigest.com/how-finance-leaders-can-equip-their-team-to-tackle-change.html "How Finance Leaders Can Equip Their Team to Tackle Change") capitalise on operational data.

**1: Make [accounts receivable](https://www.financedigest.com/a-new-vision-for-the-accounts-receivable-department.html "A new vision for the accounts receivable department") (AR) more real time**

It’s easy to get caught up in the overwhelming amount of data that needs analysing in the AR world. It’s best to focus on the metrics that matter, such as [days sales](https://www.financedigest.com/kitkat-sweetens-nestle-sales-with-easter-valentines-day-comeback.html "KitKat sweetens Nestle sales with Easter, Valentine’s Day comeback") outstanding (DSO), collections effectiveness index, turnover ratio, and average days delinquent.

Understanding AR is critical to forecasting cashflow, and unsurprisingly, automation now plays a bigger role.

A recent survey from PYMTS.com suggests that 79 percent of firms with [automated AR functions](https://www.financedigest.com/automating-repetitive-and-time-consuming-finance-functions.html "Automating Repetitive and Time-Consuming Finance Functions") are more efficient. According to the survey, a key performance indicator for the effectiveness of AR automation is a shift in DSO; simply because of its ability to track cashflow more effectively. [\[1\]](#_ftn1)

So where does a company begin with AR automation?

Invoice management is a good place to start. According to the B2B Payments Readiness playbook, “businesses handling more than 20,000 invoices per month that use automated invoice delivery tools have DSO averages up to 23 days shorter than those that rely on manual, paper-based processes.” [\[2\]](#_ftn2)

Tracking DSO during a pandemic was a nightmare. Looking to the future, ensure more AR functions are automated for forecasting cashflow.

**2: Use operational data to make more informed decisions**

An FSN study suggested there are detrimental [effects on strategic decision making if operational](https://www.financedigest.com/how-can-network-operators-monetise-television-quickly-and-effectively.html "How can network operators monetise television quickly and effectively?") data is ignored by finance teams. The study looked closely into companies using non-financial data, concluding that these businesses are two times more likely to [forecast beyond 12 months for strategic planning](https://www.financedigest.com/how-financial-planning-starts-with-a-new-approach-to-budgeting-and-forecasting.html "How financial planning starts with a new approach to budgeting and forecasting") purposes, compared to companies not using operational data.

But all is not lost. There are now specialist development tools available to support operational data collection and analysis. They use operational [data to drive](https://www.financedigest.com/crowdsourcing-of-data-to-drive-the-renal-anemia-treatment-market.html "Crowdsourcing of data to drive the Renal Anemia Treatment Market") meaningful insights, with data points held in many popular enterprise software applications. Importantly, they embed operational and [financial data into each phase of reporting to generate more business value](https://www.financedigest.com/the-value-of-customer-centricity-to-c-suite-financial-strategy.html "The value of customer-centricity to C-Suite financial strategy").

For example, if a retailer is keen to understand store profitability drivers, they can analyse operational [data like the number of check out staff or stock](https://www.financedigest.com/stocks-sag-as-hawkish-fed-cools-china-rally-awaits-us-jobs-data.html "Stocks sag as hawkish Fed cools China rally; awaits US jobs data") availability throughout a given period. From there, the [company understands the impact on sales trends](https://www.financedigest.com/mastering-the-2016-company-logo-design-trend.html "Mastering The 2016 Company Logo Design Trend") on an annual or intraday basis. Such insights positively impact [performance management](https://www.financedigest.com/goodbye-excel-spreadsheets-hello-performance-management-tools.html "Goodbye excel spreadsheets, hello performance management tools"), optimise strategy and deliver greater business value.

**3: Simplifying the month-end close**

[Managing operational finance](https://www.financedigest.com/finance-management-for-small-business.html "Finance management for small business") inputs is crucial during the ledger close. Invariably, [data entry is involved in different phases of reporting – from journal entry capture and financial](https://www.financedigest.com/how-data-governance-as-a-service-can-transform-the-financial-sector.html "How Data Governance-as-a-Service can transform the financial sector") statement preparation to transaction processing and reconciliation.

However, straight-forward ERP [solutions cause data](https://www.financedigest.com/aon-introduces-new-cyber-solution-in-response-to-eu-regulation-on-data-protection.html "Aon introduces new cyber solution in response to EU regulation on data protection") blockages. An analysis produced by Deloitte [\[3\]](#_ftn3) stated that ERP solutions don’t automate the “full, end-to-end close, consolidate and report process.” The analysis continues to observe that it can cause “a fragmented, manual, and inefficient close, as well as lead to inefficiencies throughout the accounting period.”

Business Intelligence (BI) solutions also cause difficulties during implementation, particularly if outdated [report data arrives](https://www.financedigest.com/britains-prince-harry-arrives-at-balmoral-itv-reporter.html "Britain’s Prince Harry arrives at Balmoral – ITV reporter") in the BI tool, or data aggregation levels are too high and generic. Consequently, these [data issues prevent finance teams from gaining](https://www.financedigest.com/stocks-u-s-dollar-gain-despite-surprise-weak-china-data.html "Stocks, U.S. dollar gain despite surprise weak China data") an understanding of the figures during a close cycle.

A viable [solution is automating](https://www.financedigest.com/automated-intralogistics-material-handling-solutions-market-estimates-the-market-to-expand-at-14-cagr-through-2031.html "Automated Intralogistics Material Handling Solutions Market Estimates The Market to Expand at 14% CAGR through 2031") the monotonous steps in the reporting process. It [solves a majority of the issues](https://www.financedigest.com/how-the-financial-services-industry-can-solve-the-issue-of-vulnerable-code.html "How the financial services industry can solve the issue of vulnerable code"), providing real-time reporting, with built in financial intelligence, in a format that’s familiar, like a spreadsheet. Automation expedites the reporting process, encourages team collaboration, and eliminates the margin of human error even further.

**Getting the basics right drives business value**

The pandemic has shifted the priorities of CFOs. While it continues, teams are still exploring ways to invest in technology, process improvements, and policies to support one another.

Ultimately, [real-time financial and operational data](https://www.financedigest.com/real-time-connect-nyc-where-adtech-leaders-come-together-to-redefine-data-strategies.html "Real-Time Connect (NYC): Where AdTech leaders come together to redefine data strategies") helps drive strategic decision making. If a finance team conquers the operational basics, they [increase business](https://www.financedigest.com/frances-ynsect-to-refocus-bug-business-after-capital-increase.html "France’s Ynsect to refocus bug business after capital increase") value.

It’s never been more important to get the basics right; that way, [teams can future-proof financial](https://www.financedigest.com/heres-what-the-future-holds-for-financial-planning-analysis-teams.html "Here’s what the future holds for financial planning & analysis teams") reporting and operations at a time of unpredictability.

[\[1\]](#_ftnref1) [https://www.pymnts.com/accounts-receivable/2021/automation-revolution-improves-key-metrics/](https://www.pymnts.com/accounts-receivable/2021/automation-revolution-improves-key-metrics/)

[\[2\]](#_ftnref2) https://securecdn.pymnts.com/wp-content/uploads/2021/02/PYMNTS-AMEXB2B-Playbook-February-2021.pdf

[\[3\]](#_ftnref3) https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/cfo/deloitte-nl-cfo-point-of-view-close-consolidate-and-report.pdf


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