Cash Forecasting

To determine the liquidity position of a company at any given moment is very important. Based on this position, a company can decide whether to borrow money to improve the short-term position. In addition, a company also must know if there is any cash surplus, so that funds can be invested with an interest rate higher than that offered by their normal bank account.

The forecast can be prepared on only known assets and liabilities, such as sales and purchase invoices, and also including future assets and liabilities such as purchase orders and sales quotations.

The forecast can be calculated using the Update Cash Forecast (tfcmg3210m000) session and based on the following data:

  • Manual invoices and interest invoices

    LN determines the expected cash date by the payment schedule or by the one of the following option:
    • Due Date: The date is defined in Pay-by Business Partner (tccom4114s000) session > Paying tab > Extra Days after Due Date field .
    • Expected Cash Date: The date is specified manually in Sales Invoice Cash Dates (tfcmg3110m000) > Extra Days field.
    • Average Receipt Period:The average receipt period is added to the invoice date and calculated in the Update Pay-by Business Partner Statistics (tfcmg3200m000) session.
    If no payment schedule is available, you can select manual invoices and interest invoices based on the liquidity date.

  • Sales invoices

    The forecast receipt dates for sales invoices can be one of the following dates.
    • Due Date: The date is defined in Pay-by Business Partner (tccom4114s000) session > Paying tab > Extra Days after Due Date field .
    • Expected Cash Date: The date is specified manually in Sales Invoice Cash Dates (tfcmg3110m000) > Extra Days field.
    • Average Receipt Period:The average receipt period is added to the invoice date and calculated in the Update Pay-by Business Partner Statistics (tfcmg3200m000) session.

    • Doubtful Sales Invoices

      Invoices that are set to doubtful using the Doubtful Sales Invoices (tfacr2140m000) session can be excluded from the cash forecast calculation

    • Problem Sales Invoices

      Invoices linked to the Problem/Reason code in the Problem/Reason (tfacr0120m000) session can be excluded from the cash forecast calculation.

  • Sales orders

    The liquidity date for the cash forecast is calculated based on delivery date specified, else the Planned Delivery Date specified in the order is used. In addition, the period specified in the Pay-by Business Partner (tccom4114s000) session > Paying tab > Extra Days after Due Date field is also used.

  • Project orders

    LN takes into account, the installments for projects that are not closed. The planned invoice date is used or the current date with the payment terms from the invoice (first choice) or from the business partner added. If these terms are not present, 30 days are added to the current date.

  • Sales quotations

    The planned delivery date plus the payment terms, which is retrieved from the business partner data, are used as the liquidity date. Sales quotations have an individual success rate. If the quotation's success rate is equal to or greater than the entered success rate, the quotation is taken into account. Alternative quotations are never taken into account.

  • Purchase Invoices

    • The cash date is calculated based on one of the following option:

      • Due Date: The date is defined in Pay-by Business Partner (tccom4114s000) session > Paying tab > Extra Days after Due Date field .
      • Expected Cash Date: The date is specified manually in Purchase Invoice Cash Dates (tfcmg3111m000) > Extra Days field.
      • Average Receipt Period:The average receipt period is added to the invoice date and calculated in the Update Pay-to Business Partner Statistics (tfcmg3202m000) session.
      • Discount Date: The date is specified in the payment terms.

      • Blocked Purchase Invoices

        Invoices that are linked to the Hold Reason in the Hold Reasons (tfacp0120m000) session can also be excluded from the cash forecast calculation.

  • Registered Invoices

    • The cash date is calculated based on one of the following option:

      • Due Date: The date is defined in Pay-by Business Partner (tccom4114s000) session > Paying tab > Extra Days after Due Date field .
      • Expected Cash Date: The date is specified manually in Purchase Invoice Cash Dates (tfcmg3111m000) > Extra Days field.
      • Average Receipt Period:The average receipt period is added to the invoice date and calculated in the Update Pay-to Business Partner Statistics (tfcmg3202m000) session.
      • Discount Date: The date is specified in the payment terms.

  • Purchase orders

    To calculate the liquidity date, the one of the below option is used.
    • Confirmed Delivery Date
    • Delivery Date
    • Current Planned Delivery Date
    • Planned Delivery Date: The Payment Terms defined in the order is added to the Planned Delivery Date, else the Payment Terms defined in the Invoice-from Business Partner (tccom4122s000) session is used.

  • Standing orders

    The liquidity date is defined as follows:

    • Regular payment: the planned payment date from the standing order payment schedule.
    • Unique payment: the planned payment date from the standing order. Note: To both days, the extra days in the pay-to business partner data is added.

  • Purchase Requisitions

    To define the liquidity date of a purchase requisition, the Requested Date is used. Also the Payment Terms defined in the Invoice-from Business Partner (tccom4122s000) session is used .

  • Budget

    If you have to make future payments or receipts for other transactions which are not the mentioned above, then you can set up a specific budget and add the miscellaneous transactions to that budget. Example: Salary and Wages, Taxes to be paid or future investments.

    The transactions must be accounted as below:

    • The debit balance on the Balance Sheet account is calculated as receipts.
    • The credit balance on a Balance Sheet account is calculated as payments
    • The debit balance on a Profit and Loss account are calculated as payments
    • The credit balance on a Profit and Loss account are calculated as receipts.
    To assign the budget amounts to a liquidity date, LN automatically generates the budget cash-forecast periods by taking into account the Cash Date field. All budget data for a certain period are added to the liquidity periods generated by the LN.

The expected cash position at a future date. The current cash amount is increased by the amounts to be received and reduced by the amounts to be paid, in all periods in between.