Is It Possible To Create A Cash Flow Forecast Using Cloud Accounting Software?

22nd July 2020

Is It Possible To Create A Cash Flow Forecast Using Cloud Accounting Software

Forecasting unlocks the power of accurate strategic planning and enables companies to harness their cash flow. Xero has recently launched its own integral cash flow forecasting embedded in the Xero product itself, and has a number of seamless cash flow forecasting add-ons, which revolutionise the way that future bank balances are understood.

Here’s a quick guide.

Click HERE To Request A FREE 1-Hour Initial Consultation

Understand Future Bank Balances

When planning, it helps to know what the future financial picture will look like. Trying to determine this based on number crunching alone is notoriously unreliable. This is because multiple variables influence the figures. Variables include everything from supply chain issues to changes in the weather. As such, they can be very hard to predict.

Thankfully, cash flow forecasting add-ons software such as Float, Fluidly and others use advanced algorithms to cut through the data haze. It is able to accurately calculate future spending, likely income, and fluctuations. This offers high levels of forecasting clarity.

The Model Future

One of the most accurate forecasting techniques is modelling. Creating potential scenarios enables planners to gain insight into the likely outcomes of different strategic pathways. This approach is a very powerful aid to decision-making, and gives organisations control over their direction. The cash flow add-ons use statistics and analytics to visualise short-term and long-term cash flow projections.

Performance Tracking

One of the reasons that so many SMEs find themselves in financial soup is that tracking the performance of budgets versus actuals is far from straightforward. This means that leaders do not always have an accurate view of financial performance, making decision-making a challenge. Software can offer accurate insights into performance. It gives a clear and straightforward summary of how your business is operating so that the right strategic decisions can be made. 

Managing Your Budget

Many SMEs rely on careful budgeting in order to remain afloat. Challenges with invoicing and cash flow can make this an unnerving experience. As such, managers need tight financial control. This involves being able to set budgets with confidence and accuracy. Using Xero with the right tools, gives businesses a clarified view of expected payment dates. This means that short-term and long-term budgeting can be monitored, analysed, and adjusted.

Embracing The Paper-Trail

A granular view is one of the most valuable advantages in financial forecasting. The more detail available, the more accurate the view. Being able to track transactions throughout their life-cycles means being able to weed out unreliable clients, prioritise opportunities, and shape the future of the organisation around the most attractive products and services.

Software add-ons such as Float provide accurate tracking tools, which can be harnessed to offer a dynamic competitive advantage.

Other Add-Ons

At David Howard we rely on a number of add-ons that never let us down. Both Float and Fluidly integrate well with Xero and QuickBooks, and Datadear, which also links Xero or Quickbooks data with Excel and gives a great deal of flexibility to write bespoke reports which can link into more complex forecasts. Other add ons can present better views for long term modelling and other situations, so there are a number of tools available to assist you whatever your needs.

Becoming an expert
Financial forecasting is best achieved with an experienced partner.

For more information about how David Howard can help you to optimise your figures, please email enquiries@davidhoward.co.uk.

Click HERE To Request A FREE 1-Hour Initial Consultation

 

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