Treasury departments often lack structured cash flow data for rolling and monthly planning. However, an adjacent department often has exactly what treasurers need. In this article, Alexander Fleischmann explains how existing controlling plans can be efficiently converted into cash flows to derive accurate, rolling liquidity forecasts – with less manual effort, higher quality and improved transparency throughout the entire planning process.
About the author
As Market Development Executive at Nomentia, Alexander Fleischmann is part of the sales team and looks after customers within and outside the DACH region. Alex began his career in treasury consulting before moving to the provider side, initially as a project manager for TMS implementations.
In times of economic uncertainty, the importance of sound cash flow forecasting for maintaining a company's financial health can hardly be overstated. The real question is no longer why it's important, but how best to approach it. Once the goal moves beyond short-term visibility of current receivables and payables, many companies find they lack the structured cash flow data needed to support monthly or rolling forecasts. Gathering this information from various departments and entities—typically using Excel spreadsheets—is not only time-consuming, but also prone to error. So why not use a data source that already exists in every company?
Controlling plans serve as the foundation for many internal decisions. While they may not include exact payment dates and are usually limited to a single currency, they do contain all the expenses and revenues that are relevant for cash flow forecasting too. This creates a valuable opportunity for treasurers: by converting controlling data into cash flows, they can establish a solid basis for reliable forecasts.
To transform a controlling plan into a cash flow forecast, the data first needs to be broken down and categorized by type and expected payment date. Take Company X as an example: 80% of its monthly planned revenue comes from external sources and 20% from intercompany transactions. Of the external revenue, 30% is domestic and 70% comes from exports—which can then be further segmented by country and currency. The same level of detail applies to material costs, personnel expenses, and other operating costs.
Equally crucial is determining when the actual cash flows will occur. Budget forecasts don’t typically account for the timing of when planned revenues actually turn into cash. Treasurers therefore need to work closely with financial managers across business units to determine how long after the budgeted date cash flows are expected to occur.
These so-called monetization factors convert budgeted figures into actual expected cash movements, and must be defined in close cooperation with all relevant stakeholders. However, once these rules are in place, the forecasting process becomes significantly more streamlined.
Nomentia successfully implemented this approach with one of our clients: together, we defined the monetization factors and imported them into the Nomentia cash flow forecasting module. The system now automatically translates incoming controlling data into forecasted cash flows. The result? More time to validate forecasts, improved forecast accuracy, and—last but not least—a noticeable increase in cash awareness across local entities thanks to the collaborative development process.
Whether you’re relying on complex Excel models, using AI, or transforming existing revenue plans, there are many paths to building a reliable cash flow forecast. But one thing is clear: to achieve greater efficiency, transparency, and accuracy in forecasting, a unified, integrated platform is essential—one that makes forecasts visible across the organization and offers deep insights through meaningful reporting.
Read more about cash flow forecasting
- 11 reasons to implement a cash and liquidity forecasting solution
- Why Excel fails at cash flow forecasting?
- How to win liquidity challenges in volatile global markets?
- Cash flow forecasting with AI: Benefits, requirements & implementation
- How to improve cash flow forecast accuracy with AI?
