When it comes to running a business, it is no secret that cash flow is very important. According to a recent study conducted by the Federal Reserve Bank of New York, most small business failures, up to 82%, were partly caused by cash flow problems. With statistics like this, it is obvious that every small business owner can benefit from a window into cash flow now and in the future.
Australia’s small business website suggests that a cash flow forecast can be divided into three main categories:
- Day-to-day operating activities, including receipts from sales income, expenses, employee payments
- Investment activities, including purchase of plant, equipment or property
- Financing activities, including loans and repayments
Having a solid cash flow forecasting is useful in preventing a small business from getting any unwelcome surprises. Early warning of any liquidity issues enables businesses to develop solutions to any temporary cash shortfalls, or to organize short-term investments for temporary cash surpluses.
The problem is, it has been hard to get an updated view of cashflow using Xero without analysing several areas of the business and doing some manual calculations using spreadsheet, up until now.
Benefits of Using Cashflow Forecasting Apps with Xero
What do cash flow forecasting integrations offer your business?
There is a wide range of advantages you can enjoy with cashflow forecasting add-ons for Xero. But most importantly, it will give you a clearer understanding into the future financial health of your business. This also ensures that you are equipped to make smarter decisions about your business, from where you focus your investment to how you pay off your obligations.
- Greater insight using data – By collecting and analyzing data from across your business, cash flow forecasting apps can offer you greater insight into the general financial health of your company. The data gathering procedure can be fully automated and data can be presented in such a way that it is easy to evaluate.
- Integration with other systems – If you are using the right software, you will be able to plug your app for forecasting cashflow into various systems. This provides you the opportunity to gather relevant data, as well as output data, to different points for analysis.
- Actions based by analysis – Above all, cash flow forecasting apps can help your company assess your future short-term cash needs, providing you the opportunity to study the best business and financial options for your business while maintaining a healthy cash flow.
- Centralization – Finally, forecasting cash flow apps can centralize all of your relevant data, making it easier for different aspects of the business to consult and analyze.
Top 5 Cashflow Forecasting Apps That Work Well with Xero
Float is cashflow forecasting and management software that provides all types of businesses with a real-time view of cashflow, enabling them to plan for the what-ifs and make more informed decisions about the future.
For companies in need of financial expertise, Float matches their customers with a team of Xero’s accounting and bookkeeping partners, who can offer assistance and advice – free of charge. Float has already helped hundreds of businesses using this initiative, which are in the process of rolling out across the world.
Fluidly is a smart cashflow predicting tool for businesses and their financial advisors. This manages cash that is coming in, cash that is going out, and everything in between. Accountants can also get practical advice that could help their clients manage cash flow, funding, and people in this current climate.
Spotlight is one of the most widely-used forecasting and reporting add-ons in Xero. It is designed for businesses that want to get as much information out of their financial records as possible. With this tool, you have access to a lot of powerful reporting features, such as customizable dashboards, multi-entity reports, and three-way forecasting.
Futrli is a Xero add-on that provides a solid set of forecasting and reporting functionalities without being overwhelming. It is designed to help you arrive at smarter decisions via data-driven approaches – without the technicalities. Futrli’s integration with Xero provides you with real-time data so you have the latest information possible for your reports. This forecasting add-on is particularly great at giving you a top-down view of your company and showing you overall trends.
Sometimes you need an app that does basic reports well. If the other add-ons seem more complex than what you need, Fathom offers a combination of useful reports with basic financial analysis. It specializes in putting together reports for the business owner that highlight the pertinent information and removes any unnecessary data.
Great reports and accurate forecasts make a big difference in the growth of your business. Whether you need them to support your points or you want more information in making a decision, the add-ons above should be able to assist you throughout the process.