Getting cash-flow forecasting right:
granularity and level of detail

A cash-flow forecast is only useful if it is reliable and sustainable over time. Two traps sit opposite each other: too coarse, it misses the low points; too detailed, it becomes impossible to maintain and nobody updates it. This guide gives you the right settings. For the step-by-step build method and an Excel template, see our cash-flow plan guide; here, we cover how to do it well.

1. Choose the right granularity

Granularity is the time bucket of your forecast: each column stands for a day, a week or a month. The right choice does not depend on company size, but on your cash pressure and how you use the forecast.

Bucket	When to use it	Typical horizon	Purpose
Daily	Tight cash, overdraft near, heavy due dates (payroll, VAT, big supplier) to place to the day.	2 to 6 weeks	Avoid a bounce, choose which payment goes out when.
Weekly	Day-to-day steering of an SME, active follow-up of customer receipts.	4 to 13 weeks	The best reliability / effort trade-off for most.
Monthly	Comfortable cash, budget and strategic view.	6 to 18 months	Anticipate seasons, an investment, a raise.

2. Set the horizon (how far ahead to look)

The further out you look, the less reliable it is: the short term rests on known invoices and due dates, the long term on assumptions. Hence a simple rule:

• Short term (weeks): actual amounts, expected payment dates. You steer.
• Long term (months): trends and averages (forecast revenue, recurring costs). You anticipate.

No point aiming for 24 months to the day: beyond a few weeks, precision is an illusion. Extend the horizon by widening the bucket, never by keeping the same detail.

3. Which information to include

A cash-flow forecast lists only real cash flows, placed on their payment date (not the invoice date). The items to include:

Inflows	Outflows
Customer receipts (by real due date) Grants, subsidies Capital injections, drawn loans Tax credits, VAT refunds	Suppliers Net wages and social charges VAT payable, taxes and duties Rent, energy, insurance Loan instalments (principal + interest) Investments

And the essential starting point: the real bank balance at the opening date, carried over from period to period. Anything that is not a cash flow (depreciation, provisions, unpaid income) has no place here: that is accounting profit, not cash.

4. Where to stop with detail

This is the question that discourages most people. The golden rule:

In practice, apply the 80/20 principle:

• Break out line by line what is large, variable or uncertain: your main customers (whose delay hurts), big suppliers, payroll, VAT, tax and social due dates.
• Group into a single line what is small, regular and stable: software subscriptions, bank fees, minor supplies, telecoms. One "overheads" line with an average monthly amount is plenty.

Another guardrail: do not rebuild your cost accounting inside the forecast. A forecast is not a ledger: it exists to decide fast, not to trace everything.

5. How often to refresh it

A forecast that is not updated is stale within days. The frequency follows the granularity:

• Weekly view: refresh every week (ideally the same day, e.g. Monday morning).
• Monthly view: refresh every month, at close.

Updating = replacing forecast amounts with actual receipts/payments, adjusting due dates that moved, then rolling the horizon forward by one period (the "rolling forecast" method). The forecast-versus-actual gap is your best learning tool: it makes the next forecasts more reliable.

6. The most common mistakes

• Confusing cash and profit. Being profitable does not guarantee cash at the right moment. See the difference in our cash-flow plan guide.
• Placing flows on the invoice date rather than the payment date: the forecast is wrong at the first late payer.
• Too much detail: the file becomes unmanageable, the refresh gets postponed, the forecast dies.
• Forgetting VAT and social-charge timing lags, often the biggest low points.
• A single scenario. Test at least a cautious one ("what if this customer pays 30 days later?").
• Never updating it. A forecast lives or is worthless.

From best practice to automatic

These rules are simple to state, harder to keep in a spreadsheet: placing each flow on the right date, refreshing every week, maintaining two buckets, testing scenarios. That is exactly what Dafodoo automates by connecting to your Odoo: every invoice, payment and subscription feeds an always up-to-date forecast, with real receipt dates, the right grouping level, low-point alerts and scenarios, in daily and monthly views alike.

Try Dafodoo for free