What are the prerequisites for AI-based cash flow forecasting?

The key to AI-supported cash flow forecasting is the data base. This must go back at least three years and contain sufficient details on historical cash flows so that they can be recognised by the algorithm and the cash movements can be assigned to the correct planning category. In order to create accurate forecasts with AI, the relevant expertise is also required. If this knowledge is not available within your team, you will need external consultants or a software solution such as Nomentia Cash Flow Forecasting.

How much data history do I need for AI to make sense?

It is recommended to have at least three years of history in order to be able to make accurate forecasts and analyses. A common misconception here is that if you have a forecast period of X time units, you need 3 times X as history. This is incorrect. Even if you are only forecasting 13 weeks, for example, you need a period of three years history to be able to identify seasonality and outliers. As an extreme example: If you want to forecast week 4 based on 3 weeks history, you can immediately see that this does not make sense because there is no intra-month seasonality available from previous years and the amount of data is far too small.

Where does the historical cash flow data for the forecast come from?

Ideally, the data can be derived from the ERP system through document chain analysis. This is the most effective option, as the data already contains the necessary details required for categorizing payment transactions. However, especially in a heterogeneous ERP landscape or when working with ERP systems that do not classify transactions, document chain analysis is often not feasible. In such cases, a secondary approach must be used, where the data is taken from bank statements. With this method, payment references can provide some insight into the category of the cash flow, but the level of detail is significantly more limited compared to document chain analysis.

Can AI recognise the payment behaviour of individual creditors, or is this done on a general basis?

AI can be used to recognise the payment behaviour of each individual creditor. However, when data volumes are low, similar creditors are often clustered according to country, etc.

How do you select the right models for forecasting?

Different models can yield very different results on the same historical data, depending on the data itself. That’s why it’s crucial to select models based on accuracy, speed, and transparency. Nomentia automatically preselects suitable models based on your data and requirements, but users can also add or exclude models manually. The reasons why a model has been chosen - like for example assumptions like seasonality or holiday effects - are clearly outlined in a report. The definite best model is chosen by running the forecast with the preselected models and comparing the results against actual historical data.

How to prevent "overfitting" of the models?

The risk of a model learning the training data ‘by heart’ and thus being unable to generalise to new data is prevented by validating the models with historical data and selecting the most suitable model. Another key factor here is the selection of parameters for the models, which are determined using a dedicated neural network.

How long does it take to calculate a forecast with AI?

The calculation time depends on the amount of data and the complexity of the models. However, it usually only takes a few minutes per company and category.

Does the use of AI for cash flow forecasting pose a data protection risk?

The type of AI used in cash flow forecasting – also known as predictive analytics – is based on selected historical payment data and algorithms that recognise patterns in this data. If AI-based planning is carried out using a software solution, the algorithms are pre-programmed in the system and the liquidity forecasts are calculated within the system itself. Sensitive cash flow data is therefore processed in the secure environment of the solution and is not passed on to external third-party providers.

How transparent are forecasts generated using AI?

Some providers of AI-based cash flow forecasting, including Nomentia, offer graphical representations that break down the factors included in the forecasts. This creates transparency about how the forecasts were calculated and makes them more transparent. Nomentia also provides a detailed report for each forecast on the internal and external factors taken into account, which can highlight observations and trends that a treasurer might not be able to identify with the naked eye, thus ensuring a deeper understanding of the various influencing factors.

How do liquidity management solutions improve treasury decision-making?

They consolidate real-time cash data from ERPs and banks, automate forecasting, and enable scenario modeling. With integrated analytics, treasurers gain a single source of truth for liquidity — improving accuracy, minimizing manual effort, and supporting faster, data-driven strategic decisions.

How accurately does the solution forecast cash flow?

Accuracy in cash flow forecasting helps companies make timely financial decisions, reducing reliance on expensive short-term borrowing. Nomentia’s cash and liquidity forecasting tool leverages real-time data integration and robust analytics to enhance precision, giving finance teams a reliable view of future cash positions.

Can the forecasting solution integrate with our existing ERP and banking systems?

Integration ensures seamless data flow, enhancing data reliability and reducing manual input errors. Nomentia’s cash and liquidiy forecasting solutions connect easily with major ERP and banking platforms, consolidating all cash and liquidity data in one place for efficient, informed forecasting.

How often can forecasts be updated?

Frequent cash and liquidity forecast updates are crucial in volatile markets to adjust for cash flow fluctuations. Nomentia supports real-time and on-demand forecasting updates, allowing businesses to adapt quickly and maintain visibility over their cash positions.

Does forecasting solution provide multi-currency support?

For global businesses, managing cash in multiple currencies is essential to avoid FX risk. Nomentia’s multi-currency support simplifies liquidity forecasting across regions, enabling accurate aggregation of funds and FX exposure analysis.

Does the forecasting solution support scenario planning?

Scenario planning helps companies prepare for cash flow uncertainties. Nomentia’s forecasting tool includes scenario modeling, allowing finance teams to simulate various conditions and assess liquidity impacts, aiding in more resilient financial planning.

How scalable is the solution as we grow?

Scalability ensures that the forecasting tool can grow with the business. Nomentia’s solutions are designed to expand easily, adapting to additional accounts, new markets, and higher transaction volumes, making it a long-term liquidity management partner.

How can companies effectively mitigate liquidity risk?

Liquidity risk mitigation starts with accurate visibility into cash positions, reliable forecasting, and strong contingency plans. Treasurers should stress-test scenarios, diversify funding sources, and align liquidity buffers with business strategy to remain resilient under market volatility.

What are the first steps to building a liquidity management plan?

Start by mapping all cash inflows and outflows across entities and banks. Define liquidity KPIs, centralize data collection, and automate visibility through a TMS or reporting tool. From there, establish forecasting routines and governance to ensure long-term cash control and stability.

What should treasurers look for when selecting a cash flow forecasting tool?

The most effective tools integrate directly with banks and ERPs, centralize multi-entity data, and automate updates to reduce manual work. They also support scenario analysis, real-time visibility, and collaborative workflows, helping treasurers improve accuracy and decision-making across the organization.

What are the most effective ways to improve cash flow forecasting accuracy?

Centralize all cash data, integrate it directly with banks and ERPs, and replace manual spreadsheets with forecasting tools. Enhance models with scenario analysis, update forecasts regularly, and align responsibilities across treasury, FP&A, AR, and AP teams to ensure consistency and reliability.

What are the main objectives of liquidity management?

Liquidity management ensures that a company can meet short-term obligations while optimizing the use of available cash. Its objectives include maintaining cash flow stability, covering debts and expenses, providing financial flexibility for investments, strengthening creditworthiness, and supporting long-term strategic goals.

Read the latest about Cash Management & Treasury

Liquidity and forecasting

25.11.2025

4 min read

Liquidity Guide: How to get today's cash view when reports are late

When local reports are late, don't wait—estimate. Combine confirmed balances with labeled...

Bastian Zechmeister

Liquidity and forecasting

How to turn your controlling plan into a reliable cash flow forecast

Transform your controlling plans into reliable cash flow forecasts with less effort and higher...

Alexander Fleischmann

17.6.2025

2 min read

Liquidity and forecasting

Cash flow forecasting with AI: Benefits, requirements, implementation

What can AI do for cash flow forecasting, what are the requirement and concerns, and how does it...

Anja Kaufmann

23.4.2025

13 min read

Liquidity and forecasting

How to improve cash flow forecast accuracy with AI?

Use AI to improve cash flow forecasts. Increase accuracy, reduce manual errors, and make smarter...

Antti Pekkala

22.4.2025

7 min read

Liquidity and forecasting

Best 12 cash flow forecasting software in the UK

Discover the top 12 cash flow forecasting software in the UK. Compare features, pros, and key...

Antti Pekkala

5.4.2025

9 min read

Liquidity and forecasting

Best liquidity management software providers

Best liquidity management solutions for cash visibility, forecasting, treasury and risk management....

Stijn Boon

17.3.2025

14 min read

Liquidity and forecasting

11 reasons to implement a cash and liquidity forecasting solution

Discover 11 key reasons why cash and liquidity forecasting solutions improve cash flow visibility,...

Antti Pekkala

17.3.2025

15 min read

Cash management

How to mitigate liquidity risk?

If you can't control liquidity risks, you might be in big trouble. Let's cover how to mitigate...

Antti Pekkala

3.3.2025

11 min read

Cash management

When does your business need liquidity management software?

Let's take look what modern liquidity management demands from liquidity management software.

Antti Pekkala

2.3.2025

12 min read

Cash management

Best liquidity management strategies for multinational enterprises

Liquidity management can make or break your business. Let's take a look at the best liquidity...

Antti Pekkala

1.3.2025

13 min read

Liquidity and forecasting

Why Excel fails at cash flow forecasting?

Cash flow forecasting is a critical part of liquidity management and planning. Nomentia's Hubert...

Antti Pekkala

20.2.2025

10 min read

Cash management

How to win liquidity challenges in volatile global markets?

Learn essential strategies for tackling global liquidity challenges. This article covers top cash...

Antti Pekkala

11.12.2024

9 min read

Cash management

How to get started with liquidity management?

Learn how to get started with liquidity management step-by-step with Nomentia's expert insights,...

Antti Pekkala

2.12.2024

12 min read

Cash management

Beyond Excel: Choosing the best cash & liquidity forecasting solution

Learn why cash and liquidity forecasting software outperforms Excel, with expert insights,...

Antti Pekkala

27.11.2024

14 min read

Cash management

Cash flow forecasting: A top priority of treasurers?

Accuracy of cash flow forecasts is a top challenge for today's treasurer as forecasts have a...

Barbara Babati

2.8.2023

3 min read

Cash management

Complete guide to cash forecasting automation: benefits & software

This article covers why companies automate cash forecasting, how you can benefit from it, and what...

Stijn Boon

17.5.2023

11 min read

Liquidity and forecasting

A complete guide to cash flow forecasting tools

This is a guide on everything to know related to forecasting tools, with an in-depth list of all...

Stijn Boon

23.11.2022

9 min read

Liquidity and forecasting

Best cash flow forecasting software providers

AI-powered cash forecasting, real-time cash visibility, detailed reporting and scenario analysis....

Stijn Boon

20.10.2022

11 min read

Liquidity and forecasting

10 Ways to improve your cash flow forecasting process

Accurate forecasts are the backbone of cash management success. Learn how to improve your cash flow...

Stijn Boon

18.7.2022

9 min read

Liquidity and forecasting

Cash flow forecasting: objectives, benefits & techniques

This is a guide to cash flow forecasting. Learn about the definition of cash flow forecasting, its...

Stijn Boon

30.5.2022

10 min read

Liquidity and forecasting

Liquidity management: Objectives, risks, strategies & software

In this article, we cover everything related to liquidity management. Learn about liquidity,...

Stijn Boon

29.4.2022

10 min read

Liquidity and forecasting

Overcoming obstacles in cash flow forecasting

Cash flow forecast can be challenging especially when it's done in spreadsheets. Learn about the...

Barbara Babati

27.7.2021

3 min read

Nomentia
Treasury blog

Liquidity Guide: How to get today's cash view when reports are late

How to turn your controlling plan into a reliable cash flow forecast

Cash flow forecasting with AI: Benefits, requirements, implementation

How to improve cash flow forecast accuracy with AI?

Best 12 cash flow forecasting software in the UK

Best liquidity management software providers

11 reasons to implement a cash and liquidity forecasting solution

How to mitigate liquidity risk?

When does your business need liquidity management software?

Best liquidity management strategies for multinational enterprises

Why Excel fails at cash flow forecasting?

How to win liquidity challenges in volatile global markets?

How to get started with liquidity management?

Beyond Excel: Choosing the best cash & liquidity forecasting solution

Cash flow forecasting: A top priority of treasurers?

Complete guide to cash forecasting automation: benefits & software

A complete guide to cash flow forecasting tools

Best cash flow forecasting software providers

10 Ways to improve your cash flow forecasting process

Cash flow forecasting: objectives, benefits & techniques

Liquidity management: Objectives, risks, strategies & software

Overcoming obstacles in cash flow forecasting

Subscribe to our monthly Treasury Bulletin

NomentiaTreasury blog

Liquidity Guide: How to get today's cash view when reports are late

How to turn your controlling plan into a reliable cash flow forecast

Cash flow forecasting with AI: Benefits, requirements, implementation

How to improve cash flow forecast accuracy with AI?

Best 12 cash flow forecasting software in the UK

Best liquidity management software providers

11 reasons to implement a cash and liquidity forecasting solution

How to mitigate liquidity risk?

When does your business need liquidity management software?

Best liquidity management strategies for multinational enterprises

Why Excel fails at cash flow forecasting?

How to win liquidity challenges in volatile global markets?

How to get started with liquidity management?

Beyond Excel: Choosing the best cash & liquidity forecasting solution

Cash flow forecasting: A top priority of treasurers?

Complete guide to cash forecasting automation: benefits & software

A complete guide to cash flow forecasting tools

Best cash flow forecasting software providers

10 Ways to improve your cash flow forecasting process

Cash flow forecasting: objectives, benefits & techniques

Liquidity management: Objectives, risks, strategies & software

Overcoming obstacles in cash flow forecasting

Nomentia
Treasury blog