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Are there any cloud or SaaS based applications that support more advanced cash forecasting methods like Monte Carlo?


Topic Expert
Michael Hunstad
Title: Senior Strategist
(Senior Strategist, ) |

While there are certainly companies offering Monte Carlo and other analytic forecasting software in a SaaS format I'm not aware of any that are specifc to cash flow forecasting. However, I think it's on the horizon.

The real value-add of SaaS for Monte Carlo is that depending on the complexity of the problem Monte Carlo can require a lot of computing time. In applications like derivatives pricing this can be a major issue and quickly soak up all your processing power. However, in cash flow forecasting Monte Carlo models tend to be much simpler and require significantly less CPU time making locally installed applications very viable.

In addition, cash flow forecasting models - especially Monte Carlo models - tend to be very highly customized. To a large degree this limits the effectiveness of off-the-shelf, standardized forecasting software.

I've been building Monte Carlo models for cash flow forecasting for years using @Risk and Matlab. So far, I haven't run into any processing issues that would require a SaaS setup.


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