Cash Flow Forecasting in a Rapid-change Era

Under the best conditions, forecasting cash flow is hard. When the pandemic hit, forecasting became nearly a guessing game. That’s because historical data became almost useless.

But as planning specialists like to say, having an incorrect forecast is better than having none at all; you need to have something to improve as you move forward. 

Although the pandemic is still with us, with the rise of Delta and other variants waiting in the queue, another massive shutdown is unlikely. That should make it easier to get a relatively good look at your cash picture in the months ahead. But one thing is clear: how you will be generating your cash going forward is almost certainly different — in big ways or small — than how you generated it before COVID-19.

That’s because few companies escaped the need to generate more revenue online. And even for those whose business model from the outset was built around online sales, the need to expand offerings was a constant.

So, less relevant historical data combined with new ways of generating revenue are two factors your team must wrestle with as you devise ways to forecast your cash position. To help you in your task, we’ve compiled a handful of stories from CFO Dive that touch on cash flow forecasting in some measure. We hope the selection gives you ideas for how to approach the task in your organization.



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