Forecasting Overview
Cash forecasts help predict your company's future cash flow and prepare for any cash shortages. Within Trovata there are two main building blocks, called Streams, that you can use to construct your Forecast.
The two Stream types are as follows:
Data Stream (Consists of Machine Learning, Repeat History, and Manual Streams)
Invoice Stream
Data Streams utilize historical transaction data to predict future cash flows in the Forecast model. These streams can be driven by machine learning, repeating historical data, or manual input.
Invoice Streams leverage open receivable and open payable invoices from your ERP system to predict future cash flow in the Forecast model.
General Forecasting Tips
Creating Forecasts
When creating a Forecast, use "All Accounts" when creating a company-wide Forecast model and use "Select Accounts" when creating a more specific, entity based Forecast model
Your forecast view will be impacted by your currency selection, which can be edited later at any time.
Data Streams
Selecting a Model Date Range determines which period of time, and in turn which transactions, are used by the algorithm to predict future cash flow
If the Model Date Range isn't selected, it will default to 3 months
There technically is no minimum or maximum when using the model date range selector, but the generally, the more data the better.
If there is no data for a certain period of time, the system will be pulling in 0's
Data Streams can be updated by clicking into the Stream, opening Settings, and updating the data source.
At least 100 transactions are needed in any Tag-Based Data Stream to resemble some form of accuracy
Forecast Manipulation
Use the Min and Max Value indicators to prevent the 4 models from going below or above a certain value
Data can be overwritten in any Stream
Any outflows will need to be entered in as negative values
Use the Editor to type in data directly, or use the Upload function to import data from an Excel document
Use the Weekend Manager to remove weekend data, or move it to a certain day/week
Use Factors to influence your Streams on a consistent basis into the future
The Growth +/- Factor is used for any % increase/decrease in cash values
The Shift Factor is used to push data backwards or forwards on the timeline
General Forecasting Best Practices/Troubleshooting
Machine Learning (ML) Data Stream Accuracy
Try setting the start of the Model Date Range on the day a transaction occurred and end on the day a transaction occurred
If your business experienced turbulence in a certain month that isn't representative of your cash flow, it may be helpful to not include that month in the Model Date Range
Generally, it's helpful to have a healthy range of data to capture in your Model Date Range (6 months or more)
However, it's also worth noting that if the Model Date Range is too broad, it may not pick up on certain trends