Definition
A cash collection forecast is an estimate of how much money each customer will pay you in a coming period, usually this month and next.
What is a cash collection forecast used for?
Revenue doesn’t pay salaries; collected cash does. In many B2B teams the salesperson who owns the relationship also chases payment, so the forecast is made per salesperson and per customer, then compared with what was actually collected. The hit rate, collected ÷ forecast, shows who forecasts reliably.
One salesperson's October forecast
Example- Forecast from 5 customers
- GBP 48,000
- Actually collected
- GBP 40,800
- Variance
- GBP −7,200
Hit rate (40,800 ÷ 48,000)
85%
A collection forecast differs from accounts receivable aging, which shows what is owed and overdue rather than what you expect to receive.