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created at

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What are the primary cash flow forecasting methods? | Hopscotch

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Can you use direct and indirect cash flow forecasting together? Yes, a hybrid model is possible and commonly used. It combines the accuracy of direct forecasting with the reach of indirect forecasting.  For example, companies can use direct forecasting to gather current data, such as how much they bring in each month to accounts receivable. They can then project that data into the future to predict performance by modeling how much the company will bring in if it meets its quarterly sales goals.  When to use direct and indirect cash flow forecasting together Using a hybrid forecasting method may be more helpful than using either one in isolation. It’s particularly insightful for companies with seasonal fluctuations in their accounts receivable. You can track patterns over time so that polarizing sales months (in which AR is either unusually high or unusually low) aren’t used to predict overall success.  A hybrid model may also help if the market is shifting to reflect a period of coolin...

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