Cash Forecasting Accuracy Measurement

Measuring the accuracy of a cash forecast sounds like a simple concept, but in reality, it can prove to be quite difficult. If you are responsible for forecasting within your organisation or rely on forecasts received from other people, the ongoing measurement of accuracy will be an important part of your forecasting process.

Without an understanding of accuracy, you won’t have the confidence to use the forecasts you generate for reporting or decision-making purposes, nor will you be able to drive improvements in accuracy.

In large organisations, where cash forecasting involves the collection of vast amounts of data, it can be difficult to know what to measure and how frequently
to measure it. In this guide, we outline some key considerations and two practical examples for measuring accuracy on an ongoing basis.