See the squeeze coming
Forecast incoming payments and outgoing commitments to identify periods when cash may run short
Know which payment changed the picture
Examine an unexpected transaction alongside invoices and account history before deciding whether it needs action
Weigh the next commitment
Compare the cash implications of a purchase, delayed receipt or changed payment schedule
Explain the decision
Keep the assumptions and records behind a financial recommendation available for review
Define what a better outcome looks like
Will we have enough cash to meet next month’s commitments?
- Start with a fair comparison
- Choose a forecast horizon and compare with the cash plan you use today, using only information available at each forecast date
- Keep the decision in view
- Identify the receipts and commitments driving a projected shortfall, then record the payment or purchasing decision your team makes
- Measure the result
- Track cash forecast error, shortfalls missed and warning lead time. Assess the effect of decisions separately from prediction quality