Monthly Cash Flow Forecast Model

What is a Monthly Cash Flow Forecast Model ? Cash Flow Forecast Models are considered essential planning tools and are used by CFOs and planning managers to ensure that its sources and uses of funds provide the necessary liquidity for the coming months' operations. Some key functionality in this type of forecast template will pull data from Profit & Loss and Balance Sheet accounts, then display monthly historical data YTD and forecast for the remaining periods of the year. Part of the logic from underlying asset and liability accounts offers a prediction of the timing for Receivables and Payables. The monthly detail provides managers with insights such as upward and downward trends in the cash flow. You will find an example of this type of forecast template below. Purpose of Cash Flow Forecast Models Companies and organizations use Cash Flow Forecast Models to ensure that the business has the cash required to fund its planned activities for the months ahead. When used as part of good business practices in a Financial Planning & Analysis (FP&A) Department, a company can improve its liquidity as well as reduce the risk of experiencing cash flow issues. Cash Flow Forecast Model Example Here is an example of a Monthly Cash Flow Forecast Report with actual data year-to-date and forecast for the rest of the year. [caption id="" align="alignnone" width="1808"] Monthly Cash Flow Forecast Model Example Monthly Cash Flow Forecast Model Example[/caption] You can find hundreds of additional examples here. Who Uses This Type of Forecast Template ? The typical users of this type of forecast template are: CFOs and Executives. Other Forecast Template s Often Used in Conjunction with Cash Flow Forecast Models Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Cash Flow Forecast Models, along with profit & loss and balance sheet forecasts and other management and control tools. Where Does the Data for Analysis Originate From? The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Netsuite and others. In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions. What Tools are Typically used for Reporting, Planning and Dashboards? Examples of business software used with the data and ERPs mentioned above are:
  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)
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