Dynamics 365 Cash Flow Forecasting: The Revolution in Finance Continues

Welcome to the future of finance, where cash flow forecasting meets sci-fi at the intersection of artificial intelligence. In today’s rapidly evolving business landscape, the ability to forecast cash flow has never been more crucial. AI revolutionizes cash flow forecasting by leveraging machine learning and predictive analytics to analyze vast datasets, identify patterns, and predict future cash flows with a higher degree of accuracy. It’s like having a financial fortune teller in your pocket! By the end of this blog, you’ll see why cash flow forecasting in D365 isn’t a workspace long forgotten about; it’s the must-have for any business looking for a dynamic, real-time approach to the unpredictable world of finance.

Bank Balance - Cash Flow Forecasting

Of course, there is always some setup involved before you can start using cash forecasts like configuring Vendor/Customer groups and Posting profiles, Main accounts for cash, Terms of payment, etc. Thankfully, D365 provides a wizard to guide you for set up and the process automation.

Navigating through each module on the left-hand side, starting with General ledger, you will select the cash account that you want to track. Optionally, you can define dependent accounts and their percentage of cash flow amounts to the primary cash account. In Accounts payable/Accounts receivable you can define typical patterns for purchasing or sales. Select the appropriate Budget model in the Budgeting tab to include the Budget register entry in cash flow forecasts. To include inventory forecast models (that’s right, multiple!), ensure the checkbox is selected on the Inventory management tab. In the Project management and accounting tab, select the Project and/or Transaction types to include.

Cash Flow Forecast Setup

If you have data that exists in external sources, fear not! External data can be imported into cash flow forecasts through our friends, Excel add-in or Data management.

Process Automation in Cash Flow Forecasting

Now, for the best part of the show – the process automation! Locate the Cash flow forecast automation in Cash and bank management. Again, a wizard is provided to guide you through the process. You can define parameters like the occurrence pattern and alerts you’d like to receive related to the automation.

Process Automation - Cash Flow Forecasting

Lastly, you must select a Cash flow forecast calculation method. Out of the box, you are provided with two methods to choose from. New means the cash flow forecast will only include new transactions and Total will include all posted transactions for that period.

Process Automation - Cash Flow Forecasting

Now you get to take advantage of the embedded Power BI dashboards in the Cash overview workspaces. These workspaces serve as a central hub where they not only tell you where your cash is sitting, but it also predicts its future moves. Based on the inflows and outflows of cash, you are given real-time insights into:

  • Cash overview – Inflows and outflows of cash, total and forecasted bank balances
  • Cash flow forecast – Daily forecast summary and details
  • Currency forecast – Forecasted currency balances and details
  • Bank balances – balances by bank in each legal entity, either in the system currency or bank currency and forecasted balances
Bank Balance
Inflows and Outflows

It’s all about being proactive rather than reactive and the automation capabilities within D365 mean less manual entry and more accurate data. It integrates with other modules, pulling in data from accounts receivable, payable, and even your budget to give you a holistic view of your cash flow position. If you are interested in other AI-driven features in D365, check out our three-part series covering additional finance automation opportunities:

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