Cash flow forecasting is crucial for several reasons:
Ensuring Liquidity: It helps businesses ensure they have enough liquidity to meet their obligations. Planning and Budgeting: It aids in more accurate financial planning and budgeting. Identifying Potential Shortfalls: It allows companies to identify potential cash shortfalls and take proactive measures. Making Informed Decisions: It provides valuable insights that support informed decision-making regarding investments and expenditures. Improving Stakeholder Confidence: A well-prepared cash flow forecast can enhance confidence among stakeholders and investors.