eThesis - School of Business electronic theses

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Cash flow forecasting is an emerging cash management function and business tool that hasn’t received much scientific attention outside the finance and accounting field. Recent technological development of business process automation and networked services has enabled accounting companies to better service their clientele, focusing more towards value-added services. The purpose of this study is to examine the cash flow forecasting services offered by the accounting companies in the SME sector. Special focus is placed on the technology usage aspect; how the solutions fit with the forecasting tasks, what are the motivational drivers that enable the service outsourcing, and how does the outsourcing affect the forecasting process.

The research problem was first considered from a contextual perspective. Financial accounting and cash flow forecasting related theories and best practices were examined. In addition, the forecasting service environment was considered for three players: customer, service provider and solution provider. Once the research context had been studied, the theoretical framework was developed, first, by examining technology adoption and usage related literature from information systems field, and then, by synthesizing relevant theories for a conceptual research model. In addition to existing IS literature, the research context and expert interviews that were done in theempirical part of the study were taken into account when developing the research model.

To evaluate the conceptual framework, a combination of quantitative and qualitative methods was used. First, expert interviews were done with representatives from all forecasting service environment players to better understand practical point of views. Then, a research instrument was developed in the form of online survey, and targeted to accounting companies. The survey resulted in 108 valid responses, which were analyzed using covariance-based structural equation modeling (SEM) techniques.

The main findings based on the survey results were that system integration is a key determinant when considering the fit of technology solutions to the forecasting tasks, especially from the data quality point of view. Furthermore, the good fit and level of data quality incline higher utilization rates of the forecasting solutions. Deeper analysis on the forecasting solution characteristics related to integration capabilities and solution specificity supported this finding. Additionally, outsourcing setting highlighted the importance of integration and automation. Unexpected finding was that neither good fit nor increased utilization of forecasting solutions seemed to have positive impact for company performance. Motivational drivers focused toward long-term uses of strategic planning and decision making tool, and short-term use of solvency management.