Improving Cash Projection Accuracy using Micro-Cash Analysis


Improve the accuracy of your cash projection reports by leveraging AI to predict invoice level delinquency of your outstanding receivables

Contents

Chapter 01

Cash Flow Projection : Definition, Stakeholders and Goals

Chapter 02

How to Build A Cash Flow Projection Report?

Chapter 03

Cash Flow Forecasting: Failures and Cause Analysis

Chapter 04

Eliminating Inaccuracy Using Micro-cash Forecasting

Chapter 05

Benefits of Cash Flow Forecasting at Various Levels
Chapter 01

Cash Flow Projection : Definition, Stakeholders and Goals


What is Cash Flow Projection?

A cash flow projection is an estimate of the amount of money you expect to flow in and out of your business over a particular period and includes all your projected income and expenses. A forecast usually covers the next 12 months, however, it can also cover a short-term period such as a week or month. It estimates an organization’s future financial position based on anticipated payments and receivables.

Purpose and Stakeholders

  • Treasury Department
  • AR Credit and Collections Team
  • CFO and other Executives
  1. Cash flow forecasts could help to predict upcoming cash surpluses or shortages to help you make the right decisions. It could help in tax preparation, planning new equipment purchases or identifying if you need to secure a small business loan.
  2. Cash flow forecast could be used to check if your business is meeting your expectations. Comparing your actual income and expenses with your forecasts can help to proactively identify and rectify underperforming areas/functions. Reviewing your actual performance against your forecasts alerts you to any variance so you can investigate and find out why there is a difference.
  3. It could be used to evaluate an upcoming business change or decision. If you’re considering hiring a new employee, for example, you’d add the additional salary and related costs into your forecast. The new figures in your cash flow forecast will tell you whether hiring that additional employee is likely to place your business in a stronger position and help you decide whether to hire them or not.
  4. Including best, worst and most likely case scenarios allows you to see how your business will fare if you suddenly hit tough times or better than expected trading conditions. Knowing how this affects your cash position allows you to make informed and educated decisions, and you’ll be more confident of running your business.

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