Cash flow forecasting in Microsoft Dynamics 365 Business Central projects a business's expected future cash position by combining the current bank balance with outstanding customer invoices, outstanding supplier invoices and their respective due dates, and any manually entered anticipated items such as planned capital spending. Rather than building a forecast manually in a spreadsheet, Business Central automates much of the calculation using data already in the system.
How cash flow forecasting works in Business Central
Business Central pulls in expected cash inflows based on outstanding customer invoices and their due dates, and expected outflows based on outstanding supplier invoices and payment terms, automatically. This gives a forecast grounded in real, confirmed transactions rather than guesswork. Finance teams can supplement this with manually entered anticipated items, such as expected new sales not yet invoiced, to build a more complete forward-looking picture across a chosen time horizon.
Cash flow forecasting in practice
- A finance director reviews a rolling 13-week cash flow forecast in Business Central each Monday, identifying potential cash shortfalls early enough to plan around them.
- A business uses the automated forecast based on accounts receivable and accounts payable data as a starting point, then adds manually entered planned capital expenditure to see the combined impact.
- A company negotiating a bank facility uses Business Central's cash flow forecast to provide the lender with a credible, data-backed projection rather than a manually built spreadsheet.
- A seasonal business uses cash flow forecasting to plan working capital requirements ahead of its busiest trading period each year.
How Advantage configures cash flow forecasting
Advantage configures cash flow forecast settings and reporting periods during Business Central implementation, helping finance teams move from manual spreadsheet forecasting to a system-driven process grounded in real transaction data.
Frequently Asked Questions
How does Business Central generate a cash flow forecast?
Business Central builds a cash flow forecast using a combination of actual current cash position, outstanding customer invoices and their due dates, outstanding supplier invoices and their due dates, and any manually entered expected items such as planned capital expenditure, projecting forward to show expected cash position over a chosen time period.
Can the cash flow forecast in Business Central include items not yet invoiced?
Yes. In addition to confirmed invoices, Business Central allows manual entry of anticipated cash flow items, such as expected sales not yet invoiced or planned one-off expenditure, giving a more complete forward-looking picture than relying on confirmed transactions alone.
How accurate is an automated cash flow forecast compared to a manual one?
An automated forecast is generally more accurate for the portion based on confirmed invoices and payment terms, since it removes manual data entry errors. Accuracy for forward-looking, unconfirmed items still depends on the quality of assumptions entered, the same as any manual forecast.
