We have a suite of adaptable models to help clients anticipate cash trends and prospects. While many general rules apply, our wide experience of different businesses and sectors reveals striking variations in their cash patterns. Where these are complex or seasonal, particular care is required.

Cash flow plans can be built up from current and immediately foreseeable transactions in micro mode, looking out several months. They can also be built down from an integrated forward view of how the forecast P&L and balance sheets may move over several years ahead, in macro mode.

It is preferable if the main assumptions behind any integrated cash forecast are referenced to a business plan, and periodically rolled forward to extend cash visibility. Regularity of review breeds greater forecast accuracy while guiding decision-making. Even if the plan is a one-page summary, we can model cash, using P&L and balance sheet projections, within one of our standard formats.  

An integrated (macro) cash flow will typically prove to be more useful for looking further into the future, whereas the shorter range (micro) cash flow, that picks up foreseeable individual transactions, will be better for periods of up to 6 months forward, and for cases where cash headroom is especially tight.

Good business managers will use integrated cash forecasts to underpin their financial plans and win credibility with shareholders, bankers and major trade partners. Properly used, integrated cash forecasting is akin to financial radar for management. It supports business control by foreseeing any future funding gaps early enough in the process to sensibly address such needs in good time.