Cash flow forecasting continues to be a major challenge for treasurers everywhere. In the 2024 Deloitte Global Treasury Survey, for example, 46% of respondents cited improving cash forecasting capabilities as a key priority for the next 12 months.

Effective forecasting is particularly challenging in today’s dynamic environment, with unexpected events, evolving market conditions and operational disruptions all potentially altering cash flow expectations.

As Marianna Polykrati, Group Treasurer of Greek aquaculture company Cooke HELLAS, explains: “In my experience, building the forecasting model is often the easiest part. The real challenge is ensuring that business assumptions are accurate, timely and consistently communicated by all stakeholders.”

Alignment, ownership, collaboration

As such, the company embarked on a project to not only improve its forecasting methodology but also create the internal processes and communication channels needed to highlight liquidity pressures, potential deviations and extraordinary events.

“The journey reinforceed an important lesson: successful cash flow forecasting is not a treasury exercise alone,” she explains. “It requires alignment, ownership and collaboration across the entire organisation.”

A key component of the project was to introduce a common forecasting template, consistent reporting timelines and shared assumptions. Cooke HELLAS also developed daily cash visibility reports and short-term cash flow monitoring tools, which “provided treasury and management with a much clearer view of liquidity and enabled faster decision-making.”

Also key were efforts to strengthen collaboration between treasury and key business functions. “Improving communication and accountability helped ensure that potential deviations, extraordinary transactions and liquidity pressures were identified earlier and reflected in the forecast more accurately,” says Polykrati.

Decision-support tool

Taking a step back, Polykrati says emerging technologies have significant potential to improve cash flow forecasting – “but their effectiveness depends on the quality of the underlying data and processes. In my view, technology should enhance forecasting capabilities, not replace sound treasury judgement.”

She explains that one of the key benefits of modern forecasting platforms is their ability to integrate directly with banking systems and ERP data sources. “This reduces manual intervention, eliminates many of the risks associated with spreadsheet-based forecasting and creates a single source of truth for cash information,” she says.

In addition, advanced analytics and AI can help identify patterns, trends and potential anomalies that may not be immediately visible through traditional methods. Polykrati notes that these capabilities can support scenario analysis, enabling treasury teams to focus more on understanding the business drivers behind cash movements, rather than assembling data.

“However, I believe that AI should be used as a decision-support tool rather than a decision-making tool,” she adds. “Forecasts will always require business insight, critical thinking and an understanding of operational realities. Technology can improve speed, consistency and accuracy, but treasury professionals must continue to challenge assumptions and apply judgement.”

Evolution of forecasting

Looking forward, Polykrati predicts the biggest evolution in cash flow forecasting will lie in enhancing treasurers’ capabilities.

“Advances in automation, system integration, analytics and AI will significantly improve data quality, visibility and the speed at which insights can be generated,” she says. “Treasury teams will spend less time gathering and validating data and more time analysing what the data means.”

But as Polykrati points out, even the most sophisticated forecasting tools cannot fully anticipate extraordinary events or understand the nuances behind business decisions. “Human judgement, experience and close interaction with the business will remain essential for interpreting signals, challenging assumptions and adjusting forecasts when circumstances change,” she says.

“The future of forecasting therefore lies in combining technology with treasury expertise. AI will help identify trends, patterns and potential risks – but the final layer of insight will continue to come from treasury professionals who understand the business and can translate uncertainty into informed decision-making.”