24th Jan 2022

Why Cash Forecasting is important to your Global Banking Operations

For many corporate treasurers, cash forecasting can take something of a backseat.

Amidst the understated morning chaos of banking portal log-ins – not to mention the scramble to establish an estimated global cash position – there’s often little time left for strategising, data analysis, and a fruitful look forwards.

If we’ve learnt anything from the last few years, however, it’s the fragility of the financial landscape. When unexpected events arise, no matter their nature – and it certainly seems as if we can’t catch a break from them –  it’s the businesses without a future-forward plan who suffer the most.

Even outside of Brexit and Covid (otherwise known as the B and C-words), the reality is that for most corporate treasurers, there’s one main obstacle to an efficient cash flow forecast: a lack of global cash visibility.

Without accurate cash visibility granted by a cash management solution, corporate treasurers have little grasp of their payables and receivables.

In other words, you’re conducting large-scale banking operations on shaky, obsolete data.

Cash forecasting is crucial to running efficient banking operations, and we’re here to tell you why – as well as the reasons a cloud-based service is the best solution.


What are the Existing Options for a Cash Flow Forecast?

Up until recent years, treasurers have relied upon two primary methods of cash forecasting.

If you’re spreadsheet-averse, the world of business might not be for you. That being said, as automated solutions such as AccessPay’s increase in popularity, corporate treasurers are becoming less and less dependent on them.

That’s good news, too; spreadsheets are highly susceptible to human error, with minute mistakes in inputs being near-impossible to identify. In fact, one study found that people are only about 50% to 80% successful when attempting to detect if there is an error in a spreadsheet cell.

They’re also rarely scrutinised as thoroughly as they should be, leading to an increased risk of poor decision-making when it comes to your cash flow and working capital.

The alternative is a Treasury Management System (TMS). They’ve been around for decades, but corporates have yet to find their true value when it comes to optimising cash flow forecasting. Not only this, but depending on the size of your business and the TMS used, they can rack up costs from the thousands to the millions.


Why is Cash Forecasting Important?

The vast majority of corporates fall into two categories: those who are cash-rich and understand that they are liquid and will need to find a return for their cash balances, and those who are debt-reliant, depending on short-term daily financing to maintain cash flow.

Regardless of which your treasury function falls into, there are substantial benefits associated with cash forecasting. We’ve compiled several here in order to help you visualise the future of your workflow.


  • Accurate short-term forecasts allow you to access higher yield liquidity solutions. Money Market Funds typically have a trading deadline of 12:00/13:00, meaning that you’re short on time for daily strategising. If you wish to invest – or, alternatively, if you’re in shortfall, source money – corporate treasurers need an accurate short-term forecast to know their end-of-day position early.


  • Accurate forecasting means you can reduce the buffers left on account. You can take those idle, non-ROI balances and place the funds into profitable instruments.


  • Accurate forecasting allows you to plan ahead to access structured debt financing solutions. Debt financing costs are vastly reduced if you have formalised arrangements in place with your banks. This includes loan facilities, cross-currency pooling, and revolving credit.


  • A proactive C-Suite wants to know in advance what cash will be available. When senior executives have access to accurate cash forecasting granted by cash visibility, they’re more able to make well-informed operational decisions, form a clear company direction, and suggest more detailed growth strategies for the future. The corporate treasurer with access to this information can become a key advisor to the C-Suite.


  • Accurate forecasting is the only way to manage key treasury tasks such as foreign exchange risk. Knowing what currencies you are going to have available and when prevents making the wrong FX trades or swap deals.


  • Forecasting and review of forecasting help identify delinquent actors on both payables and receivables. Cash flow forecasting allows you to detect whether internal departments are making payments out of cycle, or whether customers are paying late/early.


  • Forecasting can reduce silos in the business. Corporate treasurers could minimise the requirement for external solutions and allow global pooling and inter-company lending to be maximised.


Finding yourself with no time to strategise or invest? AccessPay’s cloud-based Cash Management solution gives you both the time and cash visibility to effectively conduct short-term and long-term cash forecasting.


Who is Cash Forecasting Important For?

Accurate cash forecasting has ramifications for both those in treasury teams and higher up the business – it’s as simple as that.

For corporate treasurers, determining working capital, liquidity, and potential cash surpluses or shortfalls should be the bread and butter of the role. Due to the inefficiencies of archaic workflows, however, such as those brought about by a reliance on spreadsheets and banking portals, they’re too often left in the shadows of such important data.

With an effective cash management solution, corporate treasurers are able to increase cash flow visibility, reduce risk, and enhance strategic decision-making support – a significant competitive advantage they’ll be able to bring to their organisation.

Likewise, treasury managers are essential in providing financing and treasury consultative advice to senior management, meaning that both short-term and long-term cash forecasting is essential to their role. In many instances, they’ll also be managing short-term investments to ensure cash flow is maintained efficiently, meaning that the availability of cash forecasting data is crucial to their success.

Treasury analysts are dependent upon accuracy, something often not granted by Treasury Management Systems or spreadsheets. Employed by organisations to oversee their finances – typically consisting of managing cash flow, accounts payable/receivable, liability obligations, and assets – treasury analysts can benefit greatly from an accurate cash forecast, providing another addition to their repertoire of analysis tools.


How AccessPay Can Support Cash Forecasting

Any treasurer or finance expert should be well aware that cash flow forecasting is an iterative experience, with no fix-all silver bullet.

Today’s forecast, though? Cloudy (we’re based in Manchester, after all) with a chance of hidden cash.

AccessPay’s Cash Management solution is perfectly positioned to provide the global cash position transparency required for accurate cash forecasting. By offering a tailored dashboard of your organisation’s cash, payables, and receivables – no matter the number of subsidiaries, countries, or currencies – forecasting becomes a vastly streamlined experience thanks to the wealth of data at your fingertips.

Not only does this only you to see and control your cash, but also optimise it. Our cloud-based, automated service removes the need for cumbersome, time-consuming banking portal log-ins that dominate your day and compromise your ability to prepare for the daily Money Market Fund deadline.

With this extra time, you or your team are able to spend valuable hours poring over your newfound data, increasing the opportunity for strategy and wise investment decisions.

For many, the increased visibility uncovers hidden goodies, too.

If you’d like to learn more about how you can free up millions in working capital with AccessPay’s Cash Management solution – as well the role of cash forecasting in global banking operations – check out our complete companion article here.

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