Top 6 VITAL Benefits of Accurate Cash Forecasting


Accurate financial forecasting can be of vital importance to any organisation. Done to best practices, a business can reap a number of positive results that are simply not possible in sub-optimal forecasting environments. Conversely, If you lack the knowledge or understanding of potential financial surpluses and shortages, it can have dire consequences for the health or survival of your company. At CashForce, we understand the necessity of accurate forecasting. Here, we detail the 6 vital benefits that stem from understanding the nature of your future financial state.

#1 – Liability Management

As liquidity becomes fully visible, a company has the ability to pay down expensive external debt. This comes as a result of a fully integrated liquidity management programme, which consolidates intercompany cash positions from an increased visibility of cash balances and cash flow trends throughout the organisation. Through higher consolidation of cash at the corporate or regional level, a treasury can utilise these funds to pay down external debt, thus reducing interest expense.

#2 – Liquidity Management

There are a number of ways in which the cash resources of an organisation, revealed by best practice forecasting, can be put to use to provide superior results. This use of surplus internal liquidity can greatly aid commercial development and other strategic initiatives. Potential avenues include low cost internal funding, consolidation into a notional pool or physical sweeping in a zero-balancing arrangement.

#3 – Understanding The Future

For treasurers, accurate forecasting is vital in providing a dependable and complete view of an organisation’s capital position. Without this it becomes difficult to plan for the future, masking the known inflows and outflows of cash that are committed to happen over the forecasted period. Executed correctly, forecasting allows for the most effective allocation of capital for an organisation’s success.

#4 – Savings On Bank Overdraft Costs

When liquidity needs are accurately forecasted, the need to use overdraft facilities is greatly reduced or eliminated entirely. This can come at great financial benefit for a business. With no overdraft fees to pay, bank charges can be reduced, leading to significant savings.

#5 – Effective FX Exposure Management

Poor management of a company’s FX exposure can sink a business. Forecasting has the ability to identify upcoming exposures, giving a business the opportunity to identify, plan and execute hedging options to mitigate this risk. On the whole, a cash flow hedge programme is typically handled separately by global business units. This process can be made far more effective. If applicable currency exposures such as intercompany sales are integrated into the cash flow forecast process, treasury efficiencies can be improved, reducing time wastage from duplicate efforts.

#6 – Eliminating The Need For Idle Cash.

With the ability to mobilise trapped or hidden cash, a reliable forecast can be crucial in developing an enhanced level of financial efficiency. These pools of current and projected surplus cash are held around the corporate infrastructure for a variety of reasons. The interest management of an entire organisation is able to benefit from this enhanced efficiency. This cash mobilization can be directly attributed to increased forecasting accuracy.


CashForce cash flow software detects issues ahead of time, drills down to root causes, allows you to simulate solutions and then take action.

Save money, improve your processes and avoid financial issues.

With clients in almost every industry from professional services to manufacturing, CashForce is changing how companies forecast their finances.

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