Forecast treasury: how to ensure financial sustainability

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In its day-to-day operations, a company has numerous responsibilities and often ends up neglecting its treasury management, which in turn can lead to non-compliance with its obligations. To prevent this from happening, it is important to prioritize the control of all inflows and outflows of resources and to carry out a treasury forecast , anticipating possible scenarios that could cause a lack of financial liquidity.

What is the provisional treasury?
Forecast treasury is a financial management tool that is based on the company's historical financial data to make future predictions of receipts and payments, through the construction of treasury plans, which include all current and forecast financial inflows and outflows over a period of time – for example, one year.

Recurring movements of monetary inflows and outflows are those that hong kong whatsapp number database practically all transactions that occur in your company. These movements are predictable and can therefore be planned relatively in advance, and they form the basis for drawing up the forecast treasury plan.

By allowing patterns in cash flow to be identified, careful forecasting of treasury minimizes potential operational and financial risks and provides information on what will be available for investment and what will be allocated to meet future expenses and obligations, serving as a basis for making important decisions and avoiding future liquidity problems.

Advantages of carrying out a forecast treasury
When carried out correctly, forecast treasury management brings numerous benefits to your company's financial management:

allows you to anticipate future needs and ensure that you have sufficient liquidity to meet your obligations;
provides greater control over accounts and payment and receipt deadlines, which can prevent negative balances;
ensures a clear and comprehensive view of your cash flows, which allows you to identify the most relevant periods for making investments;
provides recent and up-to-date data on the company's financial outlook that supports informed and conscious decision-making;
enables the adoption of strategies to cut higher expenses and reallocate financial resources more efficiently;
facilitates the recognition of deviations from the budget;
allows the identification of possible financial risks.
Some challenges inherent to forecast treasury
Forecast treasury may also have some associated challenges that require special attention:

the uncertainty associated with the treasury forecast, which can lead to significant deviations between reality and speculation;
the lack of a history of financial transactions or the difficulty in obtaining real information that may compromise the accuracy of forecasts;
maintaining compliance with current regulations and monitoring possible changes in the law;
the difficulty in predicting changes in the economic market, such as the increase in taxes and interest rates;
the exhaustive inclusion and monitoring of all the company's financial data;
the difficulty in analyzing and predicting the precise impact, on the company's liquidity, of future investments.
Practices for successful forecast treasury management
Develop a treasury plan with cash forecasts
Using the analysis of the company's financial history and the analysis of market trends, you should prepare a detailed treasury plan that includes all forecasts of cash inflows and outflows, which will serve as the basis for all decisions involving the investment of financial resources in the future.

This plan will include future expectations and forecasts of amounts received, paid and current accounts, which should be reviewed and adjusted frequently over time to reflect the business reality and the reality outside the company. It is this constant assessment that provides sufficient data to monitor, rectify and predict movements.

Introduce technological tools
The introduction of specialized software that supports the company's treasury and financial management and helps automate cash flow forecasts as accurately as possible is essential for efficient forecast treasury.

By automating the integration of data from different platforms and sources, eliminating duplication of movements, consequent human error and any associated delays, adopting ERP ( Enterprise Resource Planning ) software allows you to have a more comprehensive, timely and controlled view of what your financial position is and what it could become.

Scenario assessment and creation
For the success of the treasury forecast, it is important to discuss and analyze several possible scenarios for the company's future and the financial impact that each one may have, as well as the solutions applicable to each setback. This will allow the company's liquidity to be prepared for possible complications that are beyond its control.

Payment and receipt management
Even though you have ways of encouraging your customers to comply with payment deadlines, receipts are a part of management that you do not directly control and compliance with your own payment deadlines depends on them.

Maintaining exhaustive control over cash flows makes it possible to monitor outstanding amounts and request immediate settlement from customers who are in arrears, as well as detect amounts that are yet to be paid by your company. This ongoing management is a fundamental pillar for forecasting treasury, as it allows you to not only identify financial patterns in accounting, but also anticipate possible deviations in receipts and, consequently, in future payments.

Diligent treasury management ensures that all obligations and deadlines stipulated by suppliers are met on time, avoiding delays in payments that could subsequently lead to suspension of the service.

Cegid solutions to help your company's forecast treasury
Using a Cegid solution, such as ERP Evolution, allows you to manage all of your company’s departments in an agile and integrated manner. Financial management is no exception: you can quickly and accurately handle all current account processes, cash and bank management, bank reconciliations and even cash forecasting.

Thanks to the possibility of automatic integration from a series of information sources, including purchases, sales, inventory and banks, the generation of the forecast cash flow map is done with just a few clicks, freeing up time for its important analysis. Discover ERP Evolution and choose to manage your business with flexibility.