Cash Flow Vs Treasury Foecasts

Cash Flow Vs Treasury Foecasts.

Based on the inquiries I receive, there are many users of my Spanish website – –  who are unaware of the difference between a Cash Flow Control or Treasury Control and the Treasury Forecasts.

The main difference is a matter of timing, the Cash Flow controls the treasury information of the present and the past, while the Forecasts analyze what will happen in the future.

Both analyzes or controls have the same starting point, the current balance of the banks or cash.

While in Cash Flow you have to look back from the current balance, in Treasury Forecasts you have to look forward from the current balance.


The control of the Cash Flow is simple to manage since every company that keeps an accounting has to record the accounting entries of all bank or cash movements.

This means that the company has to transfer its money inflows and outflows from its bank accounts to an accounting information system.

Therefore, the current balance of the bank account must match the current balance of the accounting account of the corresponding bank.

Traditionally, companies used to have an accounting program through which they made the annotations of payments through accounting entries. They listed the bank statements and noted the journal number on the statement. They also wrote down in an extract the journal number that corresponded to the counterpart they were paying, such as an invoice, an expense… That is, a bank reconciliation was carried out manually.

Currently companies tend to have ERPs, increasingly affordable thanks to the advancement of new technologies.


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In ERPs, management and accounting are integrated, so it is no longer necessary to record payment accounting entries manually.

Now the file with the bank movements is imported or linked directly to the bank account data. All the accountant has to do is match the payments with their corresponding document (invoice, expense…) and the computer program will automatically generate the accounting entry and assign a reconciliation code.

This great change represents a significant saving in administrative work that does not add value to the products or services that the company sells.

However, it is an activity that an accounting company is required to carry out. So the less resources are allocated to this activity, the better for the company.


Once the accounting information is registered, we have data to perform any analysis, such as knowing money that has come from a certain client, the money that we have paid to a supplier, the cash-flow that a product or service has generated in a determined period of time or the one that has generated a specific project.

But remember that this type of analysis will always be done from the current opening balance backwards. That is, from the present to the past.


However, when we talk about Treasury Forecasts we always make a future analysis.

It is important to know what has been paid in the past, for that reason a control is kept in the accounting program or in an ERP.

But even more important is knowing how much you plan to pay in the future based on the current balance.

There are management programs that can incorporate this function, but it is not usual since the Treasury Forecasts have to be customized according to the information available and according to what the company considers it should include in the report.

The Treasury Forecast can be updated at any date, there are companies that need to carry out very short-term analysis if they are with high liquidity problems, but the usual is to perform an analysis once a month.

The Treasury Forecasts provide very valuable information to the company, since depending on the variables included, the balance that the company will have in the coming months can be anticipated, and the balance can be positive or negative.

The Treasury Forecasts allow decisions to be taken such as, for example, require financing from external sources, opt for self-financing, reduce collection periods, extend payment periods…. In other words, those measures necessary for an optimal cash flow for the company.

It also allows you to know those payment documents that have already expired that need a new expected due date.

To perform a Treasury Forecast analysis there are many variables to take into account, such as the current balances of bank accounts, available financing lines, customer invoices posted pending to be paid, supplier invoices posted pending to be paid, Recurring payments not accounted (rents, insurance, wages, repayment of loans …) and other projections of payments such as sales and purchase orders or planned projects.

Each company has its own needs, so the Treasury Forecast report must be adapted to the information of each company.


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Dani Granero

Controlling Consultant
Controller ODOO ERP

Dani Consultor Controller y ODOO


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