 Ideally, a firm's daily cash inflows should be equal to its daily cash outflows. But in real world this happens rarely or we can say that this happening it is almost impossible. Now, let us see how a firm's daily cash cycle works. On the screen, we have a hypothetical example that depict the daily cash cycle management of a typical firm. It start in the morning when the firm's manager received information from banks reporting system. And then the cash manager receives again information from the companies on source season. Then this cash manager receives updates from the company's bank on the current day transaction by the firm. Later during the day the cash management staff arranges some short term investments or some loans as necessary through certain external sources. After this the staff cash management staff meets certain funds transfer. Then the cash movements for the day are completed or these are scheduled by the related staff so that the firm's cash position can be finalized. Now, at the ending of the day certain paperwork is done for the completed transaction. And in this way the running cash worksheet is updated and it completed for the start of the next business day. Then cash management forecasting of short term cash is an important tool that is used by the cash manager of the firm on daily basis. This forecasting allows to practice working capital management very much effectively. Now, to be an effective forecasting on cash this forecasting must be very precise although a precise forecast a cash forecast may not be so accurate. Now, while forecasting periodic cash flows the firm must observe some minimum cash balance which is a protection for the firm from some unexpected cash needs or it provides a financial flexibility for the firm to take advantages of some attractive investment opportunities. While forecasting cash flows firm have some typical cash cash flows these may be a cash inflows and cash outflows. If we talk about cash inflows now the cash comes from receipts from the operations in the form of cash sales and in the form of collections from the debtors. Then funds are coming from related parties of the firm then the firm's investments may also get some maturity so their realization is in the form of cash debt proceeds may come from the creditors or the banks or some other financial institutions in the form of short and long term funds. Then there may be some other incomes like interest income or dividend income or some government from government authorities like tax refunds for the firm. Likewise forecasting of cash flow also involves some cash outflow items like payments made by the firm to suppliers and to employees in the form of payrolls. Funds transferred to subsidiaries are some related parties by the firm investments made by the firm debt repayments made by the firm in the form of interest repayments and repayment of principles. Then likewise we have tax repayments by the firm to the tax departments. Now if we talk about cash forecasting system then a system effectively structured this cash forecasting system may be structured for different time horizons like a short period, medium term and long term while forecasting periodic cash flow certain aspects are necessary to consider like data frequency relating to the cash flows of the firm, format and techniques in the cash flow process, accuracy of the data and reliability of the cash forecast done on the basis of the available data then the uses of forecast by the related persons and their time needs.