Definition · cash flow
Cash flow forecasting
Cash flow forecasting is the process of projecting future cash inflows and outflows over a defined horizon to anticipate liquidity needs. For cash flow forecasting, the useful boundary is the source cash view, timing horizon, owner, liquidity exposure, and operating decision before payment timing, runway, or financing options change.
Also known as cash flow forecast, cash forecasting, cash projection
Why it matters
Understanding cash flow forecasting matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo builds cash flow forecasts from connected source systems and ties each projected movement to its driver, so the forecast moves with the business instead of going stale in a manual model.
In practice
Liquidity example
Finance teams use cash flow forecasting when they need to understand cash timing before a decision is made. A team might compare expected receipts, payroll, vendor payments, and debt obligations to decide what action is needed this week.
Pluvo example
Pluvo builds cash flow forecasts from connected source systems and ties each projected movement to its driver, so the forecast moves with the business instead of going stale in a manual model.
In practice, teams should define cash flow forecasting with a clear source, owner, time period, and decision before they use it in reporting, planning, or operating reviews.
Understanding cash flow forecasting matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo builds cash flow forecasts from connected source systems and ties each projected movement to its driver, so the forecast moves with the business instead of going stale in a manual model.
A strong workflow for cash flow forecasting separates the definition from the action: first agree what the term means, then decide how it is measured, when it changes, and who is accountable for the next step.
Pluvo builds cash flow forecasts from connected source systems and ties each projected movement to its driver, so the forecast moves with the business instead of going stale in a manual model.
FAQ
What is cash flow forecasting?
Cash flow forecasting is the process of projecting future cash inflows and outflows over a defined horizon to anticipate liquidity needs. For cash flow forecasting, the useful boundary is the source cash view, timing horizon, owner, liquidity exposure, and operating decision before payment timing, runway, or financing options change.
What is the difference between direct and indirect cash flow forecasting?
The boundary for cash flow forecasting differs from related terms by scope, source data, time period, and decision use. In this glossary, it covers how cash flow forecasting projects future cash inflows and outflows over a horizon, the direct and indirect approaches, and why it matters for liquidity, so teams should compare those boundaries before using it in reporting or planning.
How accurate is a cash flow forecast?
Measure cash flow forecasting against a defined standard: agreed source data, expected output, review threshold, and owner. That makes the answer testable instead of relying on whether the result merely looks plausible.