Group cash forecasts: show where cash is available to spend

A group cash forecast should show both the total cash position and the entities that need funding. Cash in one company is not automatically available to pay another company's obligations. Keep legal ownership, currency, restrictions, transfer arrangements, and timing visible. The useful question is whether the right entity can access funds when its payment falls due.

The Association of Corporate Treasurers recommends linking forecasts to the cash-management structure and describes forecasting by time horizon and currency. Apply that discipline before consolidating. Begin with reconciled entity forecasts, identify third-party flows separately from intercompany movements, and use a consistent reporting date. A spreadsheet total should not hide a missing company or an unconfirmed transfer.

Maintain a register of bank and payment accounts with their legal entity, currency, purpose, balance source, and access owner. Identify restrictions and amounts held for customers or other parties. Distinguish settled bank cash from processor receivables or money in transit. Record when each balance becomes available to the entity that needs it.

Forecast customer receipts and operating payments at entity level. Include payroll, taxes, supplier commitments, debt service, and material capital spending on the relevant dates. If the parent pays on behalf of a subsidiary, identify both the external payment and the intercompany accounting or settlement arrangement. Ask the tax, legal, and treasury advisers to confirm the permitted structure where needed.

Link temporary funding to its repayment assumptions. A subsidiary that receives cash this month may owe it back during a later payroll cycle. Retain the approved funding terms with the forecast and model the return payment on both sides, rather than treating the initial receipt as permanent support.

Give planned intercompany transfers a shared identifier and record sender, recipient, currency, amount, expected sending date, receiving date, and approval status. Reconcile the two forecasts before eliminating the transfer from group external cash movement. If the entities disagree about amount or timing, show an exception instead of silently forcing the totals to match.

A transfer does not create group cash. In a hypothetical example, Company A starts with $500,000 and Company B with $50,000. An approved $100,000 transfer leaves A with $400,000 and B with $150,000, ignoring fees and other movements. The group still has $550,000. Counting the receipt at B without the outflow at A would overstate the group's funds.

If A's cash includes funds it cannot transfer, a positive group total does not resolve B's payment need. Document contractual restrictions, required approvals, financing conditions, and any jurisdiction-specific limits with the responsible advisers. Keep a proposed transfer outside confirmed available funding until the relevant requirements are satisfied. Group ownership alone does not establish the legal or practical ability to move funds.

Model the time between sending and receiving. A Friday payment may not fund a Monday obligation in the way the forecast assumes, depending on the route and settlement conditions. Track money in transit separately and avoid treating it as available in both accounts. Include supported fees and currency conversion amounts in the external cash view rather than eliminating them with the internal transfer.

Retain each entity's forecast in the currency of its actual obligations, then translate to the group's presentation currency using an explicit assumption. A change in the translated total is different from a receipt or payment. Show the exchange-rate assumption and distinguish planned conversions from translation used only for reporting.

For a material foreign-currency payment, identify the currency already held, any approved hedging or conversion arrangement, settlement date, and remaining exposure. Do not assume that a favorable group-currency surplus funds every local-currency requirement. Treasury should be able to identify the actual conversion or funding step needed before the payment can be made.

Present consolidated third-party cash flows, entity-level low points, funding actions, and unresolved internal mismatches. Keep local minimum cash requirements visible rather than netting every surplus against every deficit. Compare actual transfers and closing balances with the previous forecast, then investigate differences in approval, settlement, data quality, or operating assumptions.

If an external accounting team maintains the model, specify which entity owners supply data, who reviews intercompany balances, and who approves funding. The reporting package should show that each material deficit has a supported response, while preserving the distinction between an identified option and cash that is already available to use.