Treasury planning: connect liquidity, forecasts and governance

Start with cash visibility

Begin with cash that is actually available. Reconcile bank and investment balances, then distinguish unrestricted funds from amounts committed, earmarked, pledged or operationally inaccessible. A headline bank balance can overstate room to act.

Map the timing

Build the forecast from known flows and named assumptions. Start with payroll, taxes, debt service, supplier commitments and contracted receipts. Add expected sales collections and discretionary payments with realistic timing. Use weekly detail for the near term and broader periods only where precision is lower.

Explain forecast differences

Compare forecast with actual cash movement and explain the variance. Collection delays, payment timing, foreign-exchange movement, project slippage and assumption changes should be visible. A forecast improves when forecast errors are reviewed instead of simply replacing last month’s version.

Connect investments to liquidity

Link investment decisions to liquidity needs, risk limits, permitted instruments, counterparty exposure and approval authority. Yield is one consideration alongside safety, access, maturity and concentration. Maintain records of quotes, approvals, settlements, accruals and valuation inputs appropriate to the organisation’s policy.

Report scenarios and decisions

Report scenarios to decision-makers: base case, delayed receipts, accelerated payments and other material stresses. State the earliest pressure point and available response. RBI resources provide the broader financial and regulatory context; entity-specific treasury decisions must also follow internal policy, contracts, accounting requirements and applicable regulation.