Cash Flow Forecasting

Cash Flow Forecasting is an integral part of financial management in a company and allows that company to see where their cash flow will be well into the fiscal year. A cash flow forecast summarizes the receivables and deliverables in a way that allows historical and projected data to be incorporated.

Cash flow forecasts are notoriously inaccurate.  In fact in a study done in 2014* none of the surveyed organizations categorized their cash flow reporting as “highly accurate”.  This is because the numbers you get out are only as good as the numbers you put in and poor resources and lack of communication are listed as the greatest reasons for this lack of reliability of cash flow forecasting.


Revenue is a measurement of inflow of money and nothing else.

Cash flow is a measurement of money that comes into a company in the form of sales as well as other methods and depending on circumstances can be a negative amount.

When you forecast your outflows, you’ll need to include both fixed and variable costs.  Some costs will remain largely the same: payroll, inventory, shipping; while others will vary based on market conditions and elements outside your control.

Inflows should be based on historical data and the real numbers for money that will come into the business, not the next great idea and what it can bring in IF only.

What is your Plan B?  In the event that supply chains are disrupted by a major outbreak of a virus or rising seas cause shipping routes to be disrupted there are elements that are out of all of our control.  But what you can control is the plans you put in place to compensate.  A backup distributor whom you use from time to time who is local could be your saving grace in the event of an earthquake near your regular supplier.  Plan B’s also are important for exit and succession planning.

Experience Matters

TGG prides ourselves on our accurate reporting and deep understanding of company financials.  Our 20+ years of experience have shown us that the TGG Way™ ensures precise reporting and business success that accompanies the security of living by the numbers.

Cash Flow Forecasting