J.P. Morgan offers guidance on cash flow forecasting

J.P. Morgan Structured Products B.V. has published a guide for businesses on the creation of cash flow forecasts and projections. The publication emphasizes that while treasury teams' roles evolve to be more strategic, their core responsibility remains: to understand where a company's funds are held and how to maximize their use.

Cash positioning and forecasting are essential for daily financial operations. Well-defined processes help businesses maximize investments, minimize expenses, and plan for expansion. Cash positioning aggregates daily account balance and transaction information into a single place to ensure sufficient funds for daily operational needs.

The publication notes that many companies use Excel for cash positioning, but technological solutions, such as bank-provided APIs or specialized treasury management systems (TMS), can automate the process significantly. This frees up resources from manual data entry and reduces the risk of errors.

The cash positioning process involves identifying all company accounts and aggregating critical data, such as opening and available balances, and expected inflows and outflows. Leveraging technology can automate data pulls from banks and internal systems, improving timeliness and accuracy.