A 12-month cash flow forecast is a financial tool businesses use to project their cash inflows and outflows over the course of a year (ie,how high its income and expenses during the year).This forecast helps companies anticipate future cash movements, reduce financial risks and create financial long term financial plans. 

For example, a 12-month rolling forecast could be January through December 2025. When January 2026’s results are finalized, you could replace it with January 2027. The forecast encompasses 12 months, but slides forward every month.

Why is a 12-month cash forecast important for businesses?

While shorter time frames such as a 13-week cash flow forecast or monthly updates provide valuable short term insights, a 12-month cash flow forecast provides a comprehensive view that can bolster long-term strategic planning. A 12-month forecast leaves room for seasonal fluctuations in cash inflows and outflows. Understanding these patterns allows you to strategically allocate resources, prepare for potential downswings, and capitalize on peak periods.

A year-long forecast also provides the extended visibility needed for informed capital expenditure planning and investment decisions. It gives your business the foresight to align funding strategies with projected cash availability, supporting sustainable growth and expansion.  Over a 12-month horizon, companies can predict and mitigate cash shortages, enabling operational agility and financial stability. This is especially important for companies looking at longer term, large financial events, such as mergers, acquisitions or raising capital.

A 12-month cash flow forecast provides a comprehensive view that can bolster long-term strategic planning

How does a 12-month cash flow forecast work?

Creating a 12-month cash flow forecast is actually pretty simple; Businesses must compare the expected income with the expected expenditure for each month. Then, they’ll subtract the expenses from the income, showing whether the expenses exceeds the income or if the month ended in a surplus or deficit.

In order to make those calculations, you must gather historical data (e.g. all revenue and expenses). To make these types of forecasts more accurate, companies may pull their ERP data from the last year.

Revenue might include:

• Customer payments
• Cash sales
• Subsidies and other funding
• Tax refunds 
• Income from financial investments
• Income from licenses or patents 

Expenditures might include:

• Employee salaries
• Rent for office spaces, warehouses, and/or production halls
• Supplier payments
• Software license fees 
• Operating costs such as water, electricity, internet, and so on
• Insurances 
• Marketing costs

Typically 12-month forecasts—which include rolling updates— segment revenue and expenses into three primary components: operating activities, investing activities, and financing activities.

Operating Activities

• Revenues: Sales revenue, service income, accounts receivable collections
• Expenses: Salaries and wages, rent, utility bills, supplies, and accounts payable disbursements

Investing Activities

• Revenues: Sale of fixed assets, dividends from investments
• Expenses: Purchase of equipment, investment in securities, capital expenditures

Financing Activities

• Revenues: Proceeds from loans, issuance of shares or bonds
• Expenses: Loan repayments, dividend payments, share buybacks

All three components show businesses where cash originates from and how it is utilized. A rolling 12-month forecast gives a  continuous and forward-looking view of their cash dynamics, a vital part of strategic planning and financial stability.

Three tips for creating a 12 month forecast

1. Remember the company’s mission: Rolling forecasts tend to be more successful when it’s aligned to the company’s objectives and goals.
2. Invest in the right tools: spreadsheets passed from department to department could lead to disjointed and error-prone documentation. Consider a flexible forecasting software that will increase accuracy and save resources.
3. Adjust forecasts as necessary: Revisit the forecast and compare it to actual results so you can make adjustments.

How often should a cash flow forecast be updated?

Regularly updating cash flow forecasts is crucial for effective financial management. Ideally, businesses should update cash flow forecasts monthly, or even weekly to reflect the most up-to-date financial data and to accommodate any changes in market conditions or business operations. 

To control liquidity and accurately forecast, especially in uncertain economic periods, companies may even want to create several versions of their forecast. This means that they are able to compare scenarios, and accurately run scenario planning. 

This practice helps identify potential liquidity issues early so businesses can proactively  make informed financial decisions. Regular forecast updates not only track business performance, but also ensure that strategic plans align with current financial realities.

For example, if businesses see unplanned or unexplained discrepancies between forecasted and actual cash flows, they can correct them to maintain accuracy.

An Easier Way to Build 12-Month Forecasts

A 12-month cash flow forecast provides critical insight into a business’s financial health during a significant period of time, which provides enough data to better prepare for uncertainties and exercise  strategic decision-making.

Though Excel can create 12-month forecasts, the process is very manual, time-consuming and prone to human errors. Excel also doesn’t make it easy for teams to collaborate, to grant permissions to different people in different teams, or to easily share reporting. 

Panax offers an AI-driven cash management platform for lean finance teams with complex treasury needs. Panax's automation and AI makes categorizing transactions easier and quicker, and creates fuller data for forecasting. Panax offers weekly, monthly and long term forecasts based on ERP data and AI algorithms, offering flexibility to pull the relevant data into your forecast, and update it with ease. All together it makes it easy to forecast for your company, so you can optimize liquidity and work more efficiently.

Want to learn more about how Panax’s flexible forecasting can help you and your team work better? Get a demo today‍

A Cash Flow Statement (CFS) is an important financial document for any business. It summarizes how money moves in and out over a specific accounting period. Unlike other financial statements, it doesn’t just track profits or losses but provides a real-time snapshot of liquidity—the funds a company has available. By highlighting the sources and cash usages, this statement is indispensable when understanding a company's operational efficiency and financial solvency.

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Why a Cash Flow Statement is Important

Tracking a company's inflows and outflows of cash is crucial for several reasons:

1. It provides spending details: A CFS allows businesses to understand their actual financial position by categorizing where the money is coming from (eg operating activities, investing activities, or financing activities) and where it’s going. 

2. It helps with short-term planning: By following the trail of cash, businesses can better forecast future cash flows and create more suitable strategies for debt repayment, capital investments, or dividend distributions. 

3. It maintains optimum cash balance: It is important for the company toknow if too much cash is underutilized or if there’s a shortage of funds. If the business has excess cash they can use it to invest in shares or buy inventory. If there is a funds shortage, the company can look for areas to borrow funds to keep the business operating.

4. Companies can focus on generating cash: There are several ways to generate cash aside from profit. For example, when a company finds a way to save on equipment, it generates cash. Every time it collects receivables from its customers ahead of schedule, it is gaining cash.

Ultimately, a cash flow statement is both a historical and predictive tool that enhances financial planning and ensures the company has enough liquidity to meet its obligations and continue on the path of sustainable growth.

Breaking Down the Components: Operating, Investing, and Financing Activities

Let's dive deeper into the cash flow statement’s three core parts: operating activities, investing activities, and financing activities.

Operating Activities

This section shows the cash earned from the company’s daily business operations, showing the firm’s profitability. You’ll likely see cash receipts from sales of goods and services, cash payments to suppliers, and cash paid to employees. In essence, operating activities show how efficiently the company can turn its goods and services into cash.
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Investing Activities

Investing activities outline the cash used related to the company’s investments. This typically includes transactions related to the purchase or sale of long-term assets and other business investments. For example, if a company buys real estate, equipment, or patents, these transactions are reflected here.

Proceeds from sales also fall under investing activities. This section shows how a company allocates funds towards its growth and expansion efforts, focused on capital expenditures.
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Financing Activities

Financing activities on a cash flow statement detail how the company funds its operations and growth through various external sources, such as transactions with the company's owners and creditors, cash inflows from raising capital (issuing stocks or taking out loans), and cash outflows for repaying borrowed funds or distributing dividends. 

The financing activities section helps you understand the financial strategies a business employs to sustain and expand its operations.

How to Read A Cash Flow Statement 

 One of the biggest benefits of preparing a cash flow statement is that it allows you to understand current amount of cash and/or the increase or decrease in cash over a certain time period. Here’s what this can look like:

1. Cash at beginning of period: The amount of cash your company has at the start of the fiscal period. This equals the ending cash balance from the previous fiscal period.
2. Cash at end of period: The amount of cash your company has at the end of the current fiscal period.
3. Change in cash: The amount your company's cash balance increases or decreases during an accounting period. To determine this, calculate the difference in cash from your previous period to the current one.

What Can A Cash Flow Statement Tell You?

A cash flow statement can answer the following questions regarding your cash movements:

• When is there a cash flow surplus?
• What do you do with excess cash when you have it?
• When do you have a cash flow shortfall?
• What happens during a shortfall?
• How are current growth plans performing?
• What happens if another pandemic or disaster were to occur? 
• Would your business be able to handle that? For how long? How much of a drop in revenue can you handle? 

How to Prepare a Cash Flow Statement: A Step-by-Step Guide

Creating a cash flow statement may seem daunting at first, but breaking it down into manageable steps can simplify the process. Here's a step-by-step guide to preparing an effective cash flow statement for your business:

1. Gather Financial Statements

To create a cash flow statement you'll need the current and previous periods’ balance sheets, income statements, and retained earnings reports. These documents provide you with a historical snapshot of your financial activities.

Once you've gathered these financial statements look for trends such as regular expenses, steady income, and investments that will influence your cash flow statement. These documents serve as the foundation of your analysis, capturing the financial movements that ultimately flow into your CFS.

2. Determine Reporting Period

Establish whether the cash flow statement will cover a month, a quarter, or a year. These dates will depend on regulatory requirements.

Ensure you remain consistent in reporting periods across all financial statements to maintain accuracy and comparability with previous periods.

3. Choose a Method (Direct vs Indirect)

Decide whether to use the direct or indirect method to prepare the CFS
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Direct Method vs Indirect Method

The direct method is straightforward. It involves listing all cash collections and disbursements during the period, giving you a clear view of actual cash inflow and outflow from operations. This also makes it easy for stakeholders to understand inflow and outflow. The direct method can be quite time-consuming because it requires detailed records of all cash transactions.

Pros of the Direct Method:

• Provides a clear picture of cash flow from operations
• Helps improve cash management and planning

Cons of the Direct Method:

• Time-consuming to prepare due to detailed data requirements
• Less commonly used, may not align with standard internal reporting

The indirect method starts with the net income and makes adjustments for non-cash transactions, changes in working capital, and other items. This method is more popular because it's less complex to prepare; companies often have the data readily available through their financial statements. Yet, it may be less intuitive for someone trying to track exact cash movements.

Pros of the Indirect Method:

• Easier to prepare and widely used
• Less detailed data requirements
• Compatible with other financial statements, as it starts with net income

Cons of the Indirect Method:

• Doesn't show actual cash flows from operating activities as clearly
• Can be more complicated for readers to comprehend cash inflows and outflows

Cash Flow Statement Example

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Excel Resources for Cash Flow Statement Preparation

• Template.net - Cash Flow Statement Templates
• ‍Vertex42 - Cash Flow Statement
• Xero - Cash Flow Statement Template

Advanced Issues with Cash Flow Statement Preparation

Interest Payments

‍When preparing a cash flow statement, knowing how to classify interest payments or expenses is vital. These can be categorized under operating activities or financing activities, depending on the accounting standards or policies the business adopts.

Under operating activities: In many systems, like the US GAAP, interest paid is included in the operating activities section of the cash flow statement. This categorization is based on the notion that interest payments are a regular business expense.

Under financing activities: Alternatively, the International Financial Reporting Standards (IFRS) give entities the choice to classify interest payments as either operating or financing activities. When classified under financing activities, interest payments reflect the cost of obtaining financial resources.

Ultimately, the classification of interest payments can have a significant impact on the company’s cash flow analysis, influencing perceived liquidity and financial strategies. It is essential to be consistent with the classification to ensure clarity and comparability in financial reporting.

Depreciation:

‍Depreciation may appear as a non-cash expense in _the cash flow statement, particularly when using the indirect method. Located in the operating activities section, depreciation adjustments help reconcile net income to net cash flow from operating activities.

Within the cash flow statement, depreciation appears as an addition to net income when using the indirect method. This occurs because depreciation expenses reduce net income but do not involve actual outflows of cash.

How it affects the cash flow statement: Depreciation increases the net cash from operating activities. Since depreciation is a non-cash item, it's added back to the net income to reflect the true cash flow, counteracting the reduction in net income caused by depreciation.
This adjustment ensures users of the statement see a clear picture of cash generated from operations, separate from book expenses like depreciation.

Dividends

Dividends are a form of profit distribution to shareholders that appear under the financing activities section of the CFS. This classification is essential as it reflects a company's strategy in returning value to its investors.

Dividends impact the overall cash position of the business. By including dividends in the financing section, the CFS provides insights into how a company manages its financial obligations and shareholder relations.

• Cash Outflows: Dividends represent a business’s cash outflows . When a company decides to pay dividends, this amount reduces the available cash within the company, impacting its financing activities.
• Financial health indicator: Regular dividend payments indicate financial stability and a company's confidence in its ongoing cash flow generation. A halt or reduction in dividend payments might raise concerns about the company's cash reserves or profitability.
• Regulatory differences: It's also important to note that under generally accepted accounting principles (GAAP), paid dividends are included under financing activities. However, under International Financial Reporting Standards (IFRS), dividends may sometimes be reported within operating activities, depending on the company's accounting policies and practices.

Understanding the placement and impact of dividends on the cash flow statement is crucial because it provides valuable insights into a company's financial strategies and priorities concerning shareholder distributions.

Cash Flow Statement vs Income Statement vs Balance Statement

Understanding the distinctions between the cash flow statement, income statement, and balance sheet is important for comprehensive financial analysis. Though distinct, they all contribute to  a company's financial health portrayal.

Cash flow statement: This statement highlights the inflow and outflow of cash within a business, demonstrating its ability to manage cash efficiently for operations, investments, and financing. By focusing exclusively on cash movements, it helps assess liquidity and cash management practices.

Income statement: Also known as the profit and loss statement, this provides a summary of revenue, expenses, and profits over a specific period. It operates on an accrual basis, depicting the profitability and operational performance. Income  statements may not always reflect current cash conditions.

Balance sheet: This offers a snapshot of a company’s financial position at a particular point in time. It displays assets, liabilities, and shareholders' equity, illustrating what the company owns and owes, along with the invested capital. This allows businesses to analyze the company's net worth and financial structure.

These statements complement each other by providing a full view of the company's financial picture. The income statement shows profitability, which impacts the cash flow statement as it affects cash from operations. The balance sheet, however, records assets and liabilities directly connected to cash flow activities, such as changes in inventory or receivables.

Together, they paint a detailed picture of performance, financial position, and liquidity analysis. This triangulated approach is essential for assessing profitability, financial stability, and growth potential.

Cash flow forecasting is the process of estimating the business’s future cash levels over a specific period of time. This financial management tool helps businesses anticipate cash shortages or surpluses, allowing them to make informed operational and strategic decisions.

By accurately predicting future cash levels, companies can ensure they have enough liquidity to meet their financial obligations, invest in growth opportunities, and avoid unnecessary borrowing costs.

Cash flow forecasting is a crucial financial tool that helps businesses predict their future financial position. By anticipating the inflow and outflow of cash, companies can better understand their future cash positions, enabling them to make informed strategic decisions. This forecasting ensures that funds are available to cover obligations as they arise, thereby maintaining liquidity and avoiding potential cash shortages.

Essentially, cash flow forecasting provides a roadmap for financial planning, enhancing a company's ability to navigate future financial landscapes with confidence.

Cash Flow Forecasting vs Budgeting

A cash flow forecast predicts when income and expense charges come in and out of the bank account. A budget helps plan resources and capital for a project or business objective.

Budgeting provides a detailed financial roadmap, outlining projected revenues, costs, and resources. In contrast, cash flow forecasting zeroes in on when exactly these financial movements will occur.

Though different in focus, cash flow forecasting and budgeting are complementary. Budgets set financial targets and allocation plans that cash flow forecasts monitor in real-time. By integrating both, businesses ensure they are not only planning their finances meticulously but also dynamically adapting to cash movements. This combination helps balance long-term goals with current financial health, for accurate financial decision-making and skilled strategic planning.

Real-World Example of a Cash Flow Forecast

ABC Inc. is a  small hardware store. ABC Inc. wants to estimate the cash coming in and going out for September to ensure they can cover all their expenses and plan for any unexpected costs.

They’ll start by listing their expected cash inflows. This includes:

1. Sales revenue: $25,000
2. Customer payments on outstanding invoices: $7,000
3. Investment income: $1,000

The total of the above figures gives ABC Inc. a total projected inflow of $33,000 for September.

Next, they list their expected cash outflows, such as:

1. Supplier payments: $10,000
2. Employee salaries: $8,000
3. Utility bills: $1,500
4. Rent: $3,000

Miscellaneous expenses: $1,000

The total projected outflow amounts to $23,500.

By comparing the inflows and outflows, ABC Inc. calculates a net cash flow of $9,500 for September, meaning the business will have a surplus, leaving room for investment or savings for unforeseen expenses.

ABC Inc. will continuously update their forecast as data comes in, allowing them to adjust their spending and prediction models to maintain healthy liquidity. This proactive approach helps them to smoothly navigate through financial uncertainties.

How to Create a Cash Flow Forecast

Creating a cash flow forecast involves several key steps:

1. Determine your forecasting objective
2. Choose forecasting period (short term e.g. 13 weeks or long term e.g. 12 months forecast)
3. Choose forecasting method (direct or indirect)
4. Source your financial data

See this article for a more detailed guide on how to build a cash flow forecast

Why is Cash Flow Forecasting Important

Cash flow forecasting offers several key benefits that drive business success. Here’s a list of reasons why this tool is important.

Improved financial planning

By accurately predicting future cash inflows and outflows, you can ensure that your business remains solvent and can cover its obligations. Financial planning enables precise budgeting and resource allocation to areas that promise the highest returns.

Risk management

With a clear picture of your cash flow, you can identify potential shortfalls well in advance. This proactive approach allows you to address issues before they become critical, whether by securing additional funding or strategically adjusting expenditures.

Better decision making

Equipped with detailed financial projections, you can make informed decisions such as when to expand, invest in new projects, or reduce costs. This not only supports growth but enhances your ability to respond quickly to changing market conditions.

Cash flow forecasting is a crucial tool that allows businesses to proactively manage their financial health. Whether it's allocating funds for new investments, paying down debt, or simply ensuring that all bills are paid on time, cash flow forecasting provides the clarity needed to make informed financial decisions.

Difference Between Cash Management, Cash Forecasting & Liquidity management

While interrelated, each financial tool has a distinct role in managing a company's cash and overall financial health. Let's break down the differences:

Cash management: This refers to the broad process of collecting, managing, and investing a company's cash and cash equivalents. The primary goal of cash management is to optimize liquidity, ensuring that the company has enough funds to meet its short-term obligations, while maximizing returns on any idle funds. Put simply,, cash management is about making the most efficient use of cash on hand.

Cash flow forecasting: Unlike cash management, which focuses on current cash, cash flow forecasting is future-based. It predicts the timing and amounts of future cash inflows and outflows based on historical data, market conditions, and business activities. Accurate cash flow forecasting is crucial for strategic planning and helps businesses anticipate funding needs, avoid liquidity shortfalls, and make informed decisions about investments and expenditures.

Liquidity management: This is the practice of ensuring a company can meet its short-term obligations and continue operations without financial stress. It encompasses both cash management and cash flow forecasting, but also includes managing other liquid assets that can quickly convert to cash. Effective liquidity management ensures that a business maintains sufficient cash reserves or access to capital to handle unexpected expenses or opportunities.

By understanding and utilizing these three financial strategies, businesses can maintain a robust financial standing, ensuring they are well-prepared for both current needs and future challenges.

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When it comes to running a business, forecasting cash flow is an essential practice. Cash flow forecasting involves predicting the amount of money that will flow in and out of your business over a specific period. By mastering cash flow forecasting, you can better predict future cash positions, avoid potential shortages, and effectively utilize surpluses, ensuring smooth financial operations for your business. This allows you to anticipate any potential shortfalls and plan accordingly. 

In this article, you’ll learn steps and practical tips for forecasting cash flow accurately using Excel. Let’s dive in.

The importance of managing cash flow

Understanding and managing cash flow is crucial  for several reasons, as it:

‍Ensures Liquidity: A cash flow forecast helps ensure you have enough cash on hand to meet your obligations like payroll, supplier payments, and other operational expenses.

Supports Decision Making: Accurate forecasting allows you to make strategic decisions about investments, expansions, or cost-cutting measures.

Avoids Surprises: By predicting cash flow, you can avoid unexpected shortfalls that could harm your business operations.

Builds Confidence: Providing clear cash flow projections can build confidence among investors and lenders, demonstrating that your business is well-managed and sustainable.

A good cash flow forecast acts like a financial weather report for your business, helping you prepare for sunny days and navigate through storms

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Step-by-Step Guide to Creating a Cash Flow Forecast

Creating a cash flow forecast might seem daunting, but breaking it down into manageable steps makes it easier to handle. To help you get started, we've outlined a simple, step-by-step guide to forecast your cash flow. 

1. Determine the Forecasting Period

‍Decide whether you want a weekly, monthly, 13 week or 1 year forecast. A shorter period (e.g. weekly) provides more precision for immediate decisions, while longer periods (e.g. quarterly) are better for strategic planning.

2. Choose Between Direct and Indirect Methods‍

For short-term accuracy, use direct forecasting by tracking cash receipts and payments. For longer-term, strategic forecasting, use the indirect method, which leverages financial statements like income statements and balance sheets.

3. Forecast Your Income or Sales 

‍Begin by deciding which period you want to cover, whether it's weekly, monthly, or quarterly. Look at past sales data to identify trends and make educated guesses about future sales. For new businesses, estimate your sales based on market research and potential customer base. 

4. Estimate Cash Inflows 

Consider other potential sources of cash inflows beyond sales. This includes loans, asset sales, GST rebates, or additional investments from owners. Adding these to your forecast provides a complete picture of incoming cash. 

5. Estimate Cash Outflows and Expenses

List all expected cash outflows, such as the costs required to make goods available, operational expenses, salaries, rent, utilities, and any other regular business expenses. Don't forget to include irregular expenses, like annual subscriptions or one-off purchases. 

Subtract the net outgoings from the net income for each period to determine your cash flow, which can be either positive or negative.

6. Create a Running Total

Next, you'll want to maintain a running total over time. This involves keeping a cumulative account of your cash flow. Essentially, at the end of each period, you will add or subtract your net cash flow from the previous period’s closing balance. 

How to Create a Cash Forecast with Excel

Excel is a powerful tool for creating cash flow forecasts, thanks to its versatile functionalities. Here are some key functions and features that will help you build an accurate, effective cash flow forecast: 

SUM Function: Use this to aggregate your cash inflows and outflows, providing a quick total for specific periods.

IF Function: This helps create conditional scenarios. For example, if a certain condition is met, a specific outcome is displayed.
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VLOOKUP/HLOOKUP: These functions are useful for retrieving data from different tables or sheets, allowing for dynamic references and more streamlined calculations.
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CHARTS: Visual representations such as bar charts or line graphs can help you identify trends in your cash flow over time, leading to better decision-making.
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DATE : Functions like EDATE and EOMONTH are useful for handling date-specific calculations, increasing timing accuracy in your forecasts.
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DATA VALIDATION: Use this feature to restrict the type of data or values you can enter in a cell, ensuring that your cash flow model remains consistent and error-free.
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PIVOT TABLES: Simplify large datasets by summarizing your cash flow data, making it easier to analyze and interpret your financial information.
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CONDITIONAL FORMATTING: Highlight specific cells based on conditions (such as cash inflow less than a threshold), making it easy to identify potential issues.
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GOAL SEEK: This feature can help you determine the necessary input values to achieve a specific financial goal, such as a targeted ending cash balance.

By leveraging these Excel functions and features, you can create a comprehensive and reliable cash flow forecast tailored to your business needs.

Limitations of Using Excel in Cash Forecasting

Although many businesses use Excel in their cash management because of its accessibility and flexibility, it presents a number of limitations, including: 
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‍Manual Data Entry that’s prone to human error: Entering data manually into Excel is not only time-consuming but also prone to human error. This can compromise the accuracy of your cash flow forecasts.

‍Lack of Automation: Excel lacks built-in automation features, making it difficult to update and sync your data efficiently without extensive manual effort.

‍Difficulty scaling as the business grows: As your business grows, managing larger datasets and complex financial models in Excel becomes increasingly cumbersome, hindering scalability.

‍Limited Reporting: Creating customized and dynamic reports in Excel can be challenging, often requiring advanced knowledge of formulas and pivot tables.

‍No Real-Time Collaboration: Excel does not facilitate real-time collaboration, making it hard for multiple team members to work on the same cash flow forecast simultaneously.
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‍‍5 Tips to Improve Your Cash Flow Forecasting

Accurate cash flow forecasting isn’t just about crunching numbers. It’s about understanding the ebbs and flows of your business and utilizing key strategies to anticipate future financial needs. Here are five essential tips that can enhance your cash flow forecasting: 
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Regularly Update Your Forecast

Cash flow forecast is not a set-it-and-forget-it document. Revisit and revise your forecast frequently to reflect any changes in income, expenses, or external economic factors. The more current your forecast, the more reliable your financial planning will be.

Use Historical Data Wisely

Employ past financial data to identify trends and patterns in your cash flow. This historical perspective can inform more accurate projections. However, remember that past performance isn’t always indicative of future results, so consider any anticipated changes in market conditions, seasonal fluctuations, and business growth.
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Incorporate Multiple Scenarios

Plan for the best, worst, and most likely financial scenarios. This approach helps you prepare for unexpected changes and develop contingency plans. By modeling different outcomes, you can better navigate through uncertainties.
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Monitor Key Metrics

Keep an eye on critical financial metrics like accounts receivable turnover, inventory turnover, and accounts payable days. These metrics can offer insights into your cash flow health and highlight areas where you might need to adjust your strategy.
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Communicate with Stakeholders

Effective cash flow management like cash flow monitoring often involves multiple departments and stakeholders. Maintain open communication with your finance team, suppliers, and customers. Their input can provide valuable insights and help you make more informed decisions.

Improving your cash flow forecasting is an ongoing process that requires diligence and adaptability. By following these tips, you can create a more accurate and responsive forecast, ensuring your business stays financially healthy and prepared for the future.

Done Right, A Cash Forecast Can Be One of Your Most Impactful Tools

Mastering the art of cash flow forecasting is crucial for every business, regardless of its size or industry. Ultimately, a well-prepared cash flow forecast is not just a chart filled with numbers—it's a strategic system that empowers you to navigate the financial future of your business confidently.

While Excel is a powerful tool, it has its limitations, especially when it comes to managing and updating extensive cash flow data. This is where cloud-based solutions with real-time, cash account updates come in. These solutions provide more dynamic, user-friendly, and automated features to enhance your forecasting accuracy and efficiency. 

With Panax, you can revolutionize your cash flow forecasting by leveraging powerful features such as: 

Real-time Updates: Unlike static Excel sheets, Panax offers real-time data synchronization, ensuring your forecasts are always up-to-date.
Automation: Automate repetitive tasks and reduce manual errors with intelligent automation features, saving you valuable time.
Advanced Analytics: Gain deeper insights into your cash position with powerful analytics and visual dashboards that Excel simply can't match.
Scenario Planning: Easily create and compare multiple scenarios to prepare your business for various financial situations.
Accessibility: Access your cash flow forecasts from anywhere, anytime, with cloud-based storage and security.

By incorporating Panax into your financial toolkit, you're not just overcoming Excel's limitations; you're setting a new standard for your business's financial health, ensuring you're always a step ahead in your cash flow management.
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Contact us today to see how Panax can take your cash fore forecasting forward.

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AFP 2024 is one of the biggest finance and treasury conferences of the year. This year it takes place in Nashville, making it even more exciting for participants looking to learn, but also enjoy everything the city has to offer. Here’s our take on what not to miss at AFP Nashville 2024. 

1. From Automation to Intelligence: A DIY Adventure in RPA, Sunday 1-2pm, Financial Planning & Analysis

Speakers: 

• Michelle Crowell, Director of Finance, Nextep, Inc.
• Nikita Miller, FPAC, Director of Facilities and Financial Planning & Analysis, The Kresge Foundation

Session description: Systematic data collection, transformation and analysis are at the root of the success of Treasury and FP&A. While many technologies provide automation and standard reporting, most professionals are presented with gaps in technology that must be addressed.

This session spotlights how one pioneering team successfully eradicated the need for extensive staffing by leveraging cutting-edge robotic process automation (RPA) and data transformation technologies, leading to a profound improvement in accuracy, timeliness, and the seamless distribution of business-critical information. Break free from the shackles of repetitive daily tasks, fostering a future where efficiency, precision, and scalability go hand in hand.

2. Modernizing Customer Collections and Payments, Sunday 2:30-3:30pm, Payments

Speakers: 

• Katie Chew, Managing Director, Treasury Operations, United Airlines
• Frank Pertusiello, Director, Solution Sales, Citi
• Kammy Tsang, Senior Director, Treasury, Ripple

Session description: Traditional collection and payment methods have long been plagued by high costs, inefficiencies, manual processes, and delayed settlement. As consumers become more tech-savvy, companies must adapt. In the airline industry, digital payments have transformed ticket purchases and refunds, with passengers seeking a streamlined, real-time, and flexible digital experience.

These innovations in the airline industry also apply to other consumer-facing sectors, driving similar benefits that reduces costs, streamlines operations, improves working capital, and maximizes growth. Join this session to explore these transformative innovations and their broader applications.

3. Revenge of the Tipping Point Sunday 4:30-6:00pm, Keynote

‍Speaker:

• Malcolm Gladwell 

Session description: In his latest book, New York Times bestselling author Malcolm Gladwell, revisits the phenomenon of social epidemics and examines the ways in which we have learned to tinker with and shape the spread of ideas and trends—sometimes with great success, sometimes with disastrous consequences. Today’s epidemics are turbocharged versions of their earlier counterparts, and we are more tempted than ever to try to manipulate tipping points for our own ends.

Treasury and finance professionals need to apply the concept of the tipping point – how small changes can make a big impact - to influence their organization’s success or even the world for the better. In this thought-provoking keynote, Gladwell shares the insights needed 

4. Finding Your TMS Soulmate: Swipe Right on Success, Monday 8:30am-9:30am, Treasury Management

Session description: In relationships, you don’t need to find someone who is perfect — you need to find someone who is perfect for you. The same can be said when selecting a TMS. While there is no one perfect TMS, there is one (or more) that is right for you. But how do you know which one to swipe right on?

In this session, two experts in the industry teach attendees how to successfully choose a TMS, covering selection, implementation, and usage, and including an exploration of the practical and realistic applications of the latest technologies (e.g., AI, ML, API), emerging products in the TMS space, and what you should do now.

Speakers:

• Staci Holt, CTP, Sr. Manager, Treasury Operations, Pilot Company
• Tracey Knight, Principal Consultant, SaaS-Y Business Consulting
• Danecia Stewart, Director, Treasury, NextDecade

5. Demystifying Cash Flow Forecasting, Monday 10:30-11:30am, Capital Markets & Investments

Session description: Having a robust cash flow forecast is critical for the financial health of a business both from a day to day operational and long-term strategic perspective. It provides valuable insights that enables companies to make more informed decisions, have better liquidity & working capital management, and instill investor confidence.

Discover how Salesforce’s Treasury team harnesses real-time data to gain visibility into cash and forecast future cash flows. By leveraging industry-leading technologies, they streamline and automate tedious tasks of data extraction and manipulation, and free up time for value-added analysis.

Speakers:

• Brian Krafcheck, Sr Director, Treasury, Salesforce
• Priscilla Yip, Sr. Manager, Treasury, Salesforce
• Timothy Lee, Treasury Manager, Salesforce

6. From Strategy to Execution: Best Practices for Corporate Investments, Monday 1:45-2:45pm, Capital Markets & Investments

Session description: Treasury and financial professionals play a crucial role in managing a company’s financial resources. Understanding how to best deploy excess cash, write an impactful investment policy, and invest strategically are all essential components of their responsibilities. Given the current market volatility and the uncertainty of future economic conditions, treasury professionals must be able to identify and act on opportunities as they arise.

This session explores the essential controls for managing a robust investment program, from investment selection and daily operational management, compliance controls and key performance metrics. Attendees gain valuable insights to elevate their organization’s cash management and investment strategy to the next level.

Speakers:

• Bridget Rodnick, Assistant Treasurer, BioMarin Pharmaceuticals, Inc.
• Jessica Siu, Senior Manager, Treasury, Dropbox, Inc.
• Sara Flour, CTP, Managing Director, RBC Global Asset Management

7. Request for Payments (RFP) a Year Later, Tuesday 8:30-9:30am, Payments

Session description: The U.S. receivables and payments landscape are undergoing a significant transformation, largely driven by the advent and adoption of Request for Payment (RfP) solutions facilitated by instant payment networks such as the RTP® Network and FedNow. These solutions promise to redefine bill payment and Point of Sale (POS) experiences for businesses and consumers alike.

This session not only reflects on the year’s advancements but also charts the course for future developments in RfP solutions and provides attendees with actionable insights for optimized financial operations and customer engagement.

Speakers:

• Joshua Karoly, Director, Payments, Netflix
• Cheryl Gurz, Vice President, RTP Product Management, The Clearing House
• Dean Nolan, Managing Director, Commercial Payments, Strategic Resource Management (SRM), Inc.
• Mike Thomas, SVP Head of Instant Payments, US Bank

8. Masterclass in Change Management for Finance Leaders Adopting Automation & AI, Tuesday 10:30-11:30am, Financial Planning & Analysis

Session description: Technology is changing the world faster than ever. While much has been said about the technical aspects, we must also consider the human element. Maximizing the impact of automation and AI on your finance organization requires changing how people approach their work, not just upgrading the systems that support them.

This interactive discussion explores practical strategies for building awareness and positive engagement across the organization and overcoming barriers to change while creating a culture of feedback and accountability. Attendees learn how to measure and communicate the value of automation and AI to their leadership team to successfully build buy-in for further investment in the finance function.

Speakers: 

• Derek Milioni, VP of Finance Transformation, Bakerfield Solutions
• Cassie Wang, SVP, Head of Finance, Lightship Security, Inc.
• Mariya Guttoh, FPAC, Director of FP&A & Treasury, PayJoy

9. Implementing a Treasury Policy in a Newly-Created Treasury Department, Tuesday 2:00-3:00pm, Treasury Management

Session description: In a time of market unpredictability, companies and stakeholders are prioritizing Risk Management. More important than its size, a robust treasury policy is essential for identifying, assessing, and mitigating risks, managing cash flow, and navigating business volatility, including changes in interest rates.

Teranet addressed these challenges by establishing a dedicated treasury department and creating a new, tailored treasury policy that governs its operations. This session stresses the importance of an effective treasury policy that strikes a balance—being concise, yet comprehensive - that encompasses all treasury functions, promotes accountability and is regularly reviewed at the highest levels.

Speaker: 

• John Garofano, CTP(CD), Senior Director, Treasurer, Teranet

10. Virtual/Hybrid Teams: Virtual Meeting Mastery, Wednesday 10:00-11:00am, Principles in Practice

Session description: In this workshop, attendees learn how to master virtual meetings using a specific framework that is rooted in proven best practices. It begins with learning how to start with the end in mind by having a follow up system in place before you go into a meeting. Next, attendees discover how to organize and plan their meetings using a framework to ensure everything runs smoothly.

Discussion includes tactics for effectively running meetings by staying on track and managing participation using tools and tips to guide question asking and listening.

Speaker:

• John Sanchez, Managing Director, The FPA Group

In between sessions, come and learn about Panax at Booth 239 or book a meeting directly. Panax was founded by former finance professionals, to solve the pain suffered by lean finance teams with complex treasury needs. Panax simplifies your cash complexity in one secure, flexible and easy to run platform, so you can minimize cash risk and optimize liquidity. Come along to take part in our raffle to win some awesome Lego prizes (you can pre-register here) and collect a cute baby Panax panda. 

And two bonus sessions we also recommend:

Simplifying the World of Cross-border Payments

We are living in the world of everywhere commerce. Social commerce picked up, and companies of all shapes and sizes are starting to support online payments. How can companies looking to venture into this space set up an e-commerce solution that integrates into treasury processes with minimal investment and effort? And how can the more established payment companies make cross-border payments easier and more streamlined to deliver the best user experience for customers?

In this session, hear from treasury and payments professionals across different industries who have successfully integrated international payments into their core product offering, consequently building a new revenue stream for their company.

Speakers

Saif Ashraf, Lead, New Business Treasury Implementations, Google Inc.

Christopher Mager, Senior Director, B2B Connect, Visa

Anand Natarajan, TMT and Fintech Head, Cash Management, Standard Chartered Bank‍

FX Netting: Untangling Global Intercompany Currency Flows

Approaching a treasurer to discuss their top FX priorities inevitably brings up the elephant in the room: simplifying the intercompany settlement process. This aspect is widely recognized as a significant opportunity for enhancing process efficiency and achieving cost savings, yet it often lingers low on the priority list. But is it as daunting as it seems? Join this session for firsthand details of a successful IC netting program roadmap, and a journey in optimizing an established program amidst decentralized ERP systems. Attendees leave armed with practical tips, innovative tools, and fresh ideas, regardless of where their organization stands on its journey to navigating the global intercompany FX flows.

Speakers‍

Brandon Larsen, VP of Sales and Trading (Central), GPS Capital Markets

Heber Wygant, Director of Tax & Treasury, Sundyne LLC

Bryan Ritts, Global Cash Manager, Wilsonart LLC

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Interested to learn how Panax can help with your cash management needs? Book a meeting directly.

Sign up in advance for our raffle‍

‍The EuroFinance conference in Copenhagen is one of the premier global events for finance professionals, offering deep insights into treasury, risk management, and emerging financial trends. With so many sessions to choose from, it can be hard to prioritize. Here’s our pick of five unmissable sessions that will help you stay ahead of the curve.

Higher for longer: interest rates and global growth, Wednesday 9.45am Main Stage

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‍Presenters: 

• Thomas Harr, Chief economist, head of economics and monetary policy, Danmarks Nationalbank
• Jeromin Zettelmeyer, Director, Bruegel AISBL

Session description: Global growth will continue to slow in 2024 at around 2.5 percent average, well below the historical levels that we have seen in the past two decades, due to high inflation and tightening monetary policy. Analysts predict interest rates will remain ‘higher for longer’, impacting market growth.

In terms of economic recovery the emerging markets, Asia and Africa, lead the way at 3-6 percent growth. Slightly down on previous forecasts, the world’s largest economy in the United States will see growth at around 1-2 percent according to the Economist Intelligence Unit. Europe will grow just slightly above 1.4 percent, with Germany in recession in 2024.

Behind the growth figures and predictions, inflation continues to slow the drag on growth and monetary policy easing slightly in 2025. In this session economists discuss the likely interventions of the European Central Bank and the Federal Reserve as well as central bank actions in emerging markets in the coming year to deliver a global analysis on rates and growth.‍‍

‍Revolver roulette: risks in corporate loan refinancing: Wednesday 2.00pm, Liquidity and Financing

Presenters: 

• Ramón Tolk, Senior director treasury, Avery Dennison
• Joe Fonseca, VP, global treasurer, Crocs Inc.
• Alan Chitty, Group treasurer, Pepco

Session description: Some $11 trillion dollars of global corporate loan refinancing is due to come on stream in 2024/5 signalling the biggest refinancing exercise in corporate history, according to leading rating agencies. With many revolver loans taken out at lower rates in the covid period now reaching term maturity, a huge volume of debt will need to be financed at higher rates in the coming year.

In this session we look at the challenges in refinancing and restructuring corporate debt in current markets and how treasurers and CFOs are working together to manage refinancing risks. Strategies include modelling the impact of refinancing loans across the business and managing maturities and covenants in line with the overall capital structure and risk tolerance of the business.

Treasurers on the panel will speak from the perspectives of investment grade and non investment grade ratings status.

Forecasting: the real intelligence, Thursday 11:50am, Stream 1: Cash controls

Presenters:

• Jeppe Østergård Sørensen, Senior treasury manager, LEGO Group
• Iain Currie, Director treasury operations, Prologis
• Jörg Wiemer, Co-founder, chief evangelist & lead advisor, TIS

Session description: Cash forecasting has come under intense focus in the current rate environment with many treasurers citing the ability to accurately predict cash flows into the next business cycle as the most important priority that they currently face.

Interestingly companies are still working with many different forms of cash forecasting tools, from spreadsheets to sophisticated and AI assisted forecasting. Yet essentially the accuracy of forecasting reflects the quality of the data and the visibility of cash, to the treasurer.

Treasurers comment that ‘progress, not perfection’ is the key to process improvement to more accurate forecasting, by robust data sourcing to narrow the margin of error. In the session treasurers discuss the challenges in creating ever more accurate forecasts and the solutions that they have found, working with strategic partners to create forecasts that can quickly adapt to changing business environments.‍‍

AI-powered treasury management and cash flow forecasting, Thursday 2.20pm in the Innovation Hub

Session description: Panax CEO Noam Mills, a former CFO herself, will demo the Panax platform, designed for lean finance teams with complex treasury needs. Panax’s AI and Automation driven platform gives you full visibility and control over your global cash management, with no IT necessary to set up or run the platform. With proactive insights and alerts, the Panax platform helps you to keep your finger on the pulse, so you can reduce cash risks and optimize liquidity. 

Noam is giving away some great Lego prizes at the Panax booth. You can also pre-register here to be in with a chance to win. 

Tech trends for corporates and consumers, Friday 9.10am 

Session description: As corporations are increasingly defined by their technological competitiveness and technology is evolving exponentially in all spheres, this session will explore some of the key trends and developments, parallel with AI, that are shaping future tech for companies, markets and society.

Taking in great advances in the “internet of things” which is connecting billions of devices and wearable tech that keeps us connected anywhere and everywhere, whilst generating a massive amount of data, enabling companies to optimise operations and create new customer experiences. Whilst the metaverse has yet to materialise in any popular way and the immersive digital reality experience is attracting less investment than when Meta was created, many believe in the future for immersive technologies.

The rise in cloud computing and the sharing of information and resources across workplaces and communities through cloud platforms is enabling digital economies to flourish. Blockchain too is finding new and niche applications in business.

On the negative side, cybersecurity is a big concern for companies, creating challenges around the storing and sharing of information and data. Regulation also acts both as an enabler and a harness to data intensive technologies, with protections around data sharing. Here we ask the big questions of big tech and signpost future directions in digital trends for corporates and consumers alike.

Presenters

• Debbie Kaya, Senior director of treasury, Cisco Systems, Inc.
• Robert Torvelainen, Chair, European Tech Alliance
• James Kelly, Group treasurer, Pearson
• Simon Jones, Independent treasury expert

These sessions will equip you with the knowledge and tools to navigate the evolving financial landscape. Don't miss out on these opportunities to gain insights from industry leaders and network with peers from across the globe!

Looking forward to seeing you at EuroFinance 2024!