Ion

How Corporate Treasurers Approach Medium & Long-Term Cash Forecasting

Report date: 
2 Jun 2026

Commentary

There are few subjects on which all treasurers agree. Cash forecasting is one: everyone agrees it is difficult, painful, and rarely accurate. And that is just the “easy” part, forecasting the short term, i.e., up to three months. 

What happens when you reach out into the distant future – the medium and long term cash forecast? Surely, this is vital, if nothing else, so a company can plan its dividends and debt raising or repayment in advance? But it quickly becomes difficult, as techniques start to diverge. The best short term forecast is done looking at actual cash, and mapping out the expected receipts and disbursements. Beyond three months, this generally doesn’t work, as actual payments and receipts become less certain. People start to look at the strategic plan and try to work out the likely cash impacts – most treasurers view this as being less operationally relevant. Also, some people take input from the operating units and consolidate it, while others take a “tops down” approach.

In fact, the call started with a healthy discussion: why do a longer term cash forecast at all? 

  • For several peers, cash and funding was not a real issue. In this case, a good cash forecast may enable, say, $150,000 of saved interest expense by eliminating buffers and avoiding unnecessary borrowing. But, if it costs more than $150,000 to produce this good forecast, what is the benefit?
  • Other peers had really tight cash situations, were trying hard to maintain a favourable credit rating, or needed to meet the cash targets of private equity owners. In these cases, a good cash forecast was an operational necessity, and cash generation was often a significant KPI.
  • In all cases, the view of management was an essential consideration. Without full senior management support, a good process is more or less impossible, since it requires a lot of work and cooperation by different functions.
  • Group structure is a big factor. Where funding is done locally, a group cash forecast is not necessarily useful: in this case, what matters most to the group is managing local debt levels and the amount of cash being remitted to HQ. Local entities are usually motivated to do a good forecast.

So, how do peers handle this thorny issue? - Please Register / Log In to read the rest of this commentary

 

CXC reports are based on confidential peer discussions between senior corporate treasurers sharing their solutions to complex treasury challenges.
Our commentaries, comprising the key findings from the reports are FREE to corporate treasury professionals - simply register here to apply for Basic Membership giving you access to 185+ commentaries and receive new commentaries direct to your inbox.
Our reports, available via subscription or individual purchase, are packed with practical, experience based learning allowing users to benchmark their operations and identify proven, actionable efficiencies - Read our Testimonials Here
Topics covered in this report: 
Cash forecasting
Service providers discussed in this report: 
JP Morgan, Ion, FIS, AutomationBoutique

Please log in, or create a free account, to read the whole report summary.

Corporate Treasury Technology Roadmaps

Report date: 
1 Sep 2023

Commentary

Technology is changing the way many businesses work: with online commerce, many traditionally B2B businesses are moving to B2C. Logistics and supply chains are being transformed. Ride hailing and food delivery services operate real time payment systems. Assets we used to buy are increasingly available as a service, often linked to the internet of things.

Where are our banks in this turmoil? And how are treasurers adapting? We wanted to get a first view. Judging by the response we received, we are clearly not alone in being very interested.

This report is long – even the summary takes several pages, and it does not capture all the nuances. It is well worth reading the detail – it clearly lays out the challenges treasurers are facing.

Business transformation

For the time being, treasurers are adopting a wait-and-see approach to business changes. When the business moves to B2C, or becomes a full asset as a service enterprise, treasury will adapt accordingly. In the meantime, treasurers see no need to get ahead of the business, or even necessarily be a change agent.

On the other hand, CXC members who are in the new, online enabled industries are, of necessity, proving to be early adopters of the new technologies.

Communicating with banks

Over the years, centralised global and regional treasury management has been enabled by online banking tools with balance reporting, remote account management and payment initiation.

This has brought enormous benefits to treasury management. But it is not perfect:

  • Mostly, the data is not real time. It is often yesterday’s balance and transactions
  • There are many different tools: host to host, e-banking systems, SWIFT reporting, APIs
  • Security protocols remain a conce

Please Login or Register to access the rest of this free commentary.

If you haven't previously Logged in but receive commentaries via email, simply use your email address to change your password to Log in.

Topics covered in this report: 
API, Technology
Service providers discussed in this report: 
Kyriba, FIS, Reval, Ion, Wall Street Systems

Please log in, or create a free account, to read the whole report summary.