Why Treasurers Need More Than Cash Flow Forecasts Based on Historical Account Balances?

Cash Flow Forecasting (CFF) is a critical part of a treasurer’s job and consistently ranks as a top priority. While some banks have begun offering Cash Forecasting solutions for small and medium sized company clients (SMBs), there is a misalignment between what banks and treasury professionals think of when speaking of Cash Forecasting. While banks rely on historical account balances to generate the forecasts, treasury professionals need a comprehensive tool that can consolidate future Cash Flow data from multiple sources and convert it into actionable insights. 

The Importance of Cash Flow Forecasting (CFF) for Treasurers

The recently published 2023 EACT Treasury Survey confirms a trend that has been observed in other surveys and research studies in recent years: Cash Flow Forecasting (CFF) is consistently listed as the top priority for treasurers. As an essential component of any treasurer’s job, Cash Flow Forecasting (CFF) enables effective management of an organization’s financial resources and empowers treasurers to make informed decisions.

Topics that move Treasury Topics with a focus on Cash Flow Forecasting CFF being number one prioritiy from 2020 to 2023

Source: EACT Treasury Survey 2023

Image of a graph showing Cash Flow Forecasting (CFF) major priorities for the next 12-24 months (2023-2024) in Treasury and Online Commercial Banking.

Source: EACT Treasury Survey 2023

In recent years, many parties have started to address this need, including some banks that have begun offering Cash Forecasting solutions for their SMB clients. Banks are ideally placed in this field because they already have much of the data needed to put together a good cash forecast, and they offer the products that treasurers need to take the best action once the forecast is known.

Different Perspectives on Cash Forecasting

At TreasurUp we speak with numerous banks every week and stay in close contact with a variety of SMBs to validate our concepts. Through these interactions, we have discovered a surprising misalignment on what banks and what treasury professionals think of when discussing Cash Forecasting.

Banks tend to think of Cash Forecasting as a tool that looks at the historical account balance of every account and extrapolates that data to generate a forecasted future balance for each account. 

Treasury professionals, on the other hand, think of Cash Forecasting as a tool that allows them to collect and consolidate future Cash Flow data in base currency and foreign currency from multiple people, multiple systems, and multiple companies. 

For example, they might need to collect AP and AR data from different ERPs, combine it with budgeted sales and expenses stored in Excel files, add expected dividends, account for changes in funding and capital structure, etc.

The Importance of a Streamlined Workflow

The Cash Forecasting process typically involves multiple stakeholders, potentially working across different subsidiaries, which is why it’s important to have a streamlined workflow to ensure accurate and coherent data capture. A comprehensive audit trail can also help with compliance and accuracy tracking, while a reliable method for measuring forecasting accuracy can be useful in identifying areas for improvement. 

Ultimately, what treasurers need is a forecasting system that can convert the raw data into actionable insights. For instance, the system should be able to provide recommendations on how to optimize the risk and liquidity profile of the forecast, such as whether to deposit excess USD or borrow GBP, swap USD for GBP, or hedge AUD receivables.”

The Benefits of an Actionable Forecasting System

A forecasting tool that would go beyond the historical projection of account balances and focus instead on what treasurers really mean when they speak of “Cash Forecasting” would be a win-win for companies and banks. Treasurers would have an easy and affordable solution to help them address some of the key questions they are employed to answer, such as what the cash position is today and what it will be tomorrow, what their exposures to risk are, and what they should do to manage their risk and cash effectively.

Banks would also enjoy many direct and indirect benefits, such as the potential to earn subscription fees and increase sales and margins of risk management and cash management products. A good Cash Forecasting module could be the ultimate product placement platform. A forecasting optimization algorithm would give banks the opportunity to promote the product that the client needs when they need it, for example:

  • Automatically hedge all foreign currency forecasts according to the user-defined hedging policy.
  • Provide one-click access to credit and loan products if a liquidity shortage is detected, or suggest deposit and MM funds if excess liquidity is detected.
  • Propose cash pooling and target balancing products based on client profiles with multi-entity, multi-currency structures, and turnover thresholds above a certain level.
  • Simulate the potential impact of delayed receivables and suggest asset-based finance products to mitigate the risk.
  • Simulate the potential impact of client default and offer credit insurance products to cover the associated risks

Banks would also have the opportunity to professionalize their client base and reduce their credit risk profile. Clients who have a good forecasting process in place have fewer surprises, which improves their credit rating. 

Finally, the bank has the opportunity to wow clients with a desired-yet-unexpected solution and join the club of the most innovative banks in the world.

TreasurUp’s Cash Flow Forecasting (CFF) Module

TreasurUp has recently launched a Cash Flow Forecasting (CFF) module designed by treasurers for treasurers. As with all our modules, users can’t access the Cash Forecasting module directly via us: at TreasurUp, we specialize in offering white-labeled treasury solutions via our client banks and financial institutions.

Photo of Philip Costa Hibberd, Product Manager, discussing the new module Cash Flow Forecasting (CFF) for banks in TreasurUp.


TreasurUp’s Cash Flow Forecasting (CFF) is a white-labeled solution that offers a variety of benefits for online Commercial Banking clients, including:

  1. Easy-to-use forecasting for liquidity in both domestic and foreign currencies
  2. Designed specifically for corporate treasurers of medium-sized companies
  3. Easy and flexible data loading: ERP connectivity, APIs, Excel upload and manual adjustments
  4. One-click hedging for foreign currency forecasts
  5. Workflow & Consolidation: Orchestrate the subsidiary forecasting process with one click and receive the automated consolidation and analysis at the HQ level
  6. Integrated Bank Products: One-click link to bank offerings, such as FX, credit and deposit products

If you are interested in a demo on our Cash Flow Forecasting module or any of our other treasury solutions, please click here to reach out via our website TreasurUp.com. We would be happy to answer any questions you may have and help you find the solution that’s right for your organization.

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About the TreasurUpdate Author

Philip Costa Hibberd is the Product Manager for TreasurUp’s new Cash Visibility and Forecasting module. With more than fifteen years of experience in finance and treasury, Philip is passionate about using technology to make people’s lives easier. In his role, Philip focuses on developing innovative and intuitive solutions to help banks support their corporate clients in managing their treasury challenges effectively.

TreasurUp Philip Costa Hibberd, Product Manager for new module Cash Flow Forecasting (CFF) for banks.

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