A short term cash flow forecast is a method for estimating cash inflows and expenditures over a period of less than a year. A short term cash forecast is primarily used for short term liquidity planning and to track daily cash flows on a regular basis.
Short term forecasting serves the following purposes:
Long term cash forecasts are mainly generated for a period of two to five years and help to provide a rough picture of a company’s future financing needs and investable surplus. Long term cash forecasts assist in the planning of capital projects as well as the raising of long term financing.
The following are the purposes for long term cash forecasting:
Cash forecasting process is challenging, and forecasting cash transactions is the most difficult single challenge. A detailed, bottom-up statistical approach yields the most accurate forecasts. Long term and short term cash flow forecasts have traditionally been created in spreadsheets. However, dealing with such massive amounts of data in a spreadsheet can be tedious and often time-consuming. By using HighRadius’ cash forecasting software, users can eliminate the stress of creating short and long term cash forecasting, save time, and get an accurate, up-to-date snapshot of the business’s state.
Here are some benefits of using cash forecasting software for both short and long term forecasting:
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The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.