Forecasting Cash Forecasting

Author: partner, Aite Enrico Camerinelli

Cash forecasting is essentially the process of collecting information on balances and future cash flows from business units and being able to instantly consolidate them. Today, cash forecasting represents an important – if not the most important – in a corporate treasurer’s toolbox. 

The management of liquidity and risk is at the helm of treasury strategies, and both the control of liquidity and the acceptance of risk require treasurers to maintain a continuous awareness of the financial health of the company and the needs of the company’s business network constituents. Such visibility depends on the treasurer’s ability to forecast cash needs tied to the company’s current availabilities and projected cash inflows and outflows.