Best-in-class organisations forecast both treasury and operating cash flows, using automated systems wherever possible. There is no single way of measuring short-term cash flows that works for all types of cash flows. For example, the best approach for tax payments is to ask the tax department what they predict, while for receipts and payments, and expected terms the best source is direct from the A/P and A/R ERP systems around the group.

Hans Orga International, a leading TMS supplier, provide cash flow forecasts based on:

• known incoming payments and outgoing payments (SAP payment runs, ad hoc payments, money market, cash pooling)
• previous day's forecasts
• entry of new forecasts
• the inclusion of manual payments.

An important feature of their overall cash management process, see figure below, is the automated retrieval of the value dated A/P and A/R payment data from the head office and all the business units' ERPs.

Hans Orga's cash management process flows

Source & Copyright©2013 - Hans Orga International

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The automated group-wide retrieval of value dated A/P and A/R payment data is clearly vital for accurate cash flow forecasts. The excellence of the cash flow forecasting modules in today's TMS is moving the corporate treasury department ever more central in organisations control and management. However, there is growing overlap and conflict between the TMS functionality, and the planning and budgeting systems such as Adaptive Planning and Prophix Software. This will need to be resolved.