Cash forecasting
Cash forecasting is projecting a firm's future cash inflows and outflows, by currency, account and date, to see where balances will be short or idle. For payment firms it drives how much to prefund, when to top up and when to borrow.
How it works
Bank supervisors set the benchmark. The Basel Committee's Principle 5 calls for a framework that comprehensively projects cash flows from assets, liabilities and off-balance sheet items over an appropriate set of time horizons. Principle 6 adds monitoring within and across legal entities, business lines and currencies, given the limits on moving liquidity between them.
Horizons run from intraday to more than a year. For intraday liquidity, the Committee expects banks to measure expected daily gross inflows and outflows, anticipate their timing and forecast the range of possible net shortfalls during the day. It also asks banks to project cash flows under a number of alternative scenarios.
Payment firms face strong calendar effects. In its 10-K for 2025, Remitly notes that its prefunding is higher when the year closes on a weekend or before a long weekend, and that it needs significant capital at high-volume sending times, which it may not be able to forecast accurately. In its 10-K for 2024, Intermex reported that borrowings under its revolving credit facility varied with the timing of prefunding its paying agents, mainly for weekends.
Example
A firm forecasts Mexico payouts of $1,100,000 on Thursday, $1,600,000 on Friday (a payday) and $2,300,000 over the weekend. Its partner holds $1,800,000, which leaves $700,000 after Thursday. Friday and the weekend need $3,900,000, so the Thursday top-up is $3,200,000 before any buffer.
Frequently asked questions
How far ahead should we forecast?
At least to the next point at which you can add funds in each corridor, which over a holiday weekend can be four or five days. Longer horizons help with credit line and hedging decisions.
Why do forecasts miss?
Paydays, holidays, promotions and partner outages. Compare forecast with actual by corridor every day and adjust.
Where Polynopsis fits
Polynopsis starts from the live position: what is held, where and in which currency, plus money in flight. Forecasts that update as money clears are on its roadmap.
Compared with
Related terms
Sources
- Principles for Sound Liquidity Risk Management and Supervision (September 2008) · Basel Committee on Banking Supervision
- Remitly Global, Inc. Form 10-K for fiscal year 2025 · U.S. Securities and Exchange Commission (EDGAR)
- International Money Express, Inc. Form 10-K for fiscal year 2024 · U.S. Securities and Exchange Commission (EDGAR)
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator