Cash Management

Position, forecast, and the gap between them

• Cash position: Actual cleared and available balances across every account, today. A fact.
• Short-term forecast: Days to weeks, built from known payables, receivables and payroll. Mostly arithmetic.
• Medium-term forecast: Weeks to months, built from the order book, billing schedule and capital plan. Part judgement.
• Long-term forecast: Quarters to years, driven by the business plan. Entirely judgement, and treated as such.

Forecast accuracy degrades sharply with horizon. The design question is not how to make the long forecast accurate, but how to make the short one reliable enough to act on daily.

Bank connectivity

1. 01

   Statement import

   Prior-day or intraday statements retrieved automatically, not downloaded by hand.

2. 02

   Balance consolidation

   Every account, entity and currency presented as one position.

3. 03

   Payment file generation

   Approved payment runs formatted for the bank's channel.

4. 04

   Transmission and acknowledgement

   Files delivered securely and the bank's acknowledgement matched back.

5. 05

   Reconciliation

   Cleared items matched to the subledger, exceptions reported.

Bank file formats and connectivity are almost always underestimated in ERP programs. Test with the actual bank, in the actual channel, with production-shaped files, well before go-live — not in the last fortnight.

Liquidity management

• Concentration and sweeping: Moving balances to a main account automatically, so idle cash is not scattered.
• Target balances: Minimum buffers per account, with the surplus invested or the shortfall funded.
• Facility management: Tracking drawn and undrawn facilities against covenants.
• Currency exposure: Knowing net position by currency before deciding whether to hedge it.
• Payment timing: Paying on terms rather than early, unless the discount beats the cost of capital.

Metrics and KPIs to track