Maintaining a company's cash flow is a central part of managing the business and the financing of ongoing operations — particularly for start-ups and small enterprises.
Key items and aspects of cash flow forecasting: In the context of corporate finance, cash flow forecasting is the modeling of a company or entity's future financial liquidity over a specific timeframe: short term generally relates to working capital management, and longer term to asset and liability management.
The cash flow projection is an important input into valuation of assets, budgeting and determining appropriate capital structures in LBOs and leveraged recapitalizations.
Both are limited to the monthly or quarterly intervals of the financial plan, and need to be adjusted for the difference between accrual-accounting book cash and the often-significantly-different bank balances.
One observation, [citation needed] re the commercial tools available is that while these can offer automation and predictive capabilities, there are limitations to their accuracy, especially in areas that involve human behaviour or subjective factors.
Moreover, AI tools may lack the flexibility and customization options provided by Excel, as they are typically designed to work within predefined frameworks and may not easily adapt to unique business requirements.