Cash Flow Forecasting in Microsoft Dynamics 365 Business Central

Cash flow forecasting within Microsoft Dynamics 365 Business Central is designed to allow companies to better predict their cash flow into the future and help them make informed decisions about liquidity and financial planning.

To get started, users must first complete the Cash Flow Setup, where they define key elements such as forecast periods, data sources (e.g., open sales/purchase orders, G/L budgets, manual entries), and cash flow accounts. A proper setup ensures accurate and reliable forecasts.

Key Components

1. Cash Flow Setup – Defines how forecasts are calculated, and which data sources are included

2. Cash Flow Forecast Worksheet – A workspace to generate, review, and simulate forecasts, including “what-if” scenarios.

3. Data Sources – These sources can be both system-generated and user-defined, allowing for flexible and accurate forecasting. These pull from:

• Open customer ledger entries (expected cash in)
• Open vendor ledger entries (expected cash out)
• General ledger budgets
• Sales & purchase orders
• Manual revenues or expenses
• Planned transactions (optional)
• Azure AI – This source type uses AI to make cash flow forecasting smarter and more automated. Unlike manual or budget-based methods, Azure AI learns from past trends in your general ledger, predicts future cash movements, and updates the forecast automatically — reducing manual work and improving accuracy and speed.

4. Forecasting Periods – Supports daily, weekly, or monthly forecasting over a custom time frame.

5. Cash Flow Accounts – Used to categorise forecast data, separate from standard G/L accounts.

Reporting

Forecast data can be used in Business Central’s Financial Reports, allowing users to build custom reports tailored to their needs. For deeper insights, forecasts and reports can be extended using Power BI.

Learn more in our blog on User-Defined Financial Reports in Business Central.