What should you do if your cash flow statements conflict with your expectations?


Since cash flow forecasts are only estimates, it is normal for there to be some differences between the forecast and financial reality. So what do you do if there is a discrepancy that has a significant impact on your business?

Read on to learn how to verify if there are any discrepancies in your cash flow forecasts, how data accuracy and cash flow classification can lead to discrepancies, and how to resolve these issues.

What does disagreement mean?

Cash flow forecasts are rarely 100% accurate. Therefore there will always be a difference between forecast and actual cash flows. Inconsistency with cash flow forecasting software occurs when actual cash flow differs significantly from expected cash flow. Disputes may arise for various reasons.

First steps to confirm anomalies

Compare your cash flow forecast to your actual cash flow to verify any differences in your cash flow forecast. Perform variance analysis to find significant differences between actual and planned cash flows.

You can also use a tool like Cash Flow Frog to compare planned and actual cash flows. Contact appropriate departments and employees to verify discrepancies.

Impact of dispute on business life

Disputes can affect a company in different ways. When a company's actual sales differ from planned sales, overstock, lost sales, and supply chain disruptions can occur.

Discrepancies between actual and planned costs can lead to budgeting problems or misuse of capital. If there is no consistency between the forecast and financial reality, the company may have difficulty allocating capital and resources effectively.

Incorrect forecasts can also cause companies to take a conservative approach when it is not necessary, which can lead to missed business opportunities.

Identify your reason

cash flow

Where should I look for common problems?

A good place to start looking for root causes of inconsistencies is in the input data. Poor data accuracy or irrelevant input data can lead to inaccurate cash flow forecasts. Also pay attention to your forecasting methods, assumptions, and level of detail in your cash flow classification.

Analysis of cash flow components.

To dive deeper into what causes the difference, let's look at the key components of cash flow:

  • Classification
  • misclassification of sales or expenses can lead to inaccurate cash flow estimates. For example, interest on a loan must be reported as an operating activity, but is often incorrectly classified as financing, leading to a discrepancy between actual and planned cash flows.
  • Time
  • the timing of payment can also change cash flow. For example, there is a discrepancy if you plan to collect payments from customers in the current period, but payments are actually deferred to the next period.
  • Missing/Duplicate Transactions
  • some costs, such as maintenance costs, are often overlooked and can distort cash flow forecasts. Adding a transaction twice can also distort cash flow analysis.
  • External factors
  • factors beyond your control, such as market crises, problems with suppliers and regulatory changes, may cause differences between planned and actual cash flow.

deal with disagreements

Adjust your cash flow forecast

Forecasting cash flows is an ongoing process. Once you identify an anomaly, you can update your data, collection methods, or predictive models to prevent the same error from occurring again. If external factors affect your cash flow, take this into account when forecasting your future.

When should you contact a professional?

If you're having trouble determining the cause of the difference, you may want to hire an expert. Cash flow analysts have the knowledge and experience to identify the cause of your discrepancies and can help you resolve the problem. External experts can also provide a new perspective.

Take advantage of software features for greater accuracy

Cash flow estimates can be made more accurate with the use of cash flow software. Tools like Cash Flow Frog allow you to import data from existing spreadsheets and accounting software, eliminating errors that occur in manual data entry.

Cash flow software makes it easy to compare planned and actual cash flows, which is helpful in reducing discrepancies over time.

prevent future disagreements

cash flow

Maintaining standardized collection methods throughout the organization can help prevent inconsistencies caused by poor quality data. Ensuring that the classification of cash flows is detailed and accurate can also reduce discrepancies.

Continuous monitoring and evaluation of cash flow forecasts and actual cash flows is necessary to avoid future deviations. Learn from past mistakes and work to reduce inconsistencies over time.


Discrepancies can cause business disruptions, such as lost sales, excess inventory, and missed opportunities. If you've identified a discrepancy in your cash flow forecast, first look for root causes, such as data accuracy, collection methods, misclassification, and external factors.

Once you have identified the root cause, make the necessary adjustments to your cash flow analysis to avoid making the same mistakes in future forecasts.

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