Cash flow forecasting is an important process. It's used to estimate the flow of cash that comes in and goes out of a business over a set time period. When it's accurate, it makes it easier for a business owner to predict future financial positions.
By making those kinds of predictions, the owner of a business is better able to avoid cash shortages, and invest surplus cash effectively. Naturally, both of those areas are valuable to a company, whether it's been around for a long time or it's just getting started.
Cash is constantly moving in and out of businesses. For example, when a retailer purchases inventory, money flows out.
