Cash flow tracking and forecasting

[olliehk]

Hi everyone,

New here and looking for some advice - what does everyone use to track cash flow as a new and/or small business?

The obvious answer is a spreadsheet but it obviously has its limitations particularly if you’re not a spreadsheet whizz. Are there any low cost platforms that track past cash flow as well as accurately forecasting future cash flow (and allowing for manual input of sales pipeline)?

Appreciative of any help!

 

[Paul Kelly ICHYB]

Your accounts package?

 

[fisicx]

The obvious answer is a spreadsheet but it obviously has its limitations particularly if you’re not a spreadsheet whizz.

You can download free cash flow templates for excel.

 

[Ozzy]

Are there any low cost platforms that track past cash flow as well as accurately forecasting future cash flow

Generally speaking, you should find that your current software you use for your bank reconciliation. invoicing, etc, should do this for you - even if it's a bolt on feature you need to add. All accounting software should already offer this feature.

 

[GLAbusiness]

Personally I use FreeAgent. To me, Excel is the least obvious answer.

 

[StrategyDoctor]

Hi everyone,

New here and looking for some advice - what does everyone use to track cash flow as a new and/or small business?

The obvious answer is a spreadsheet but it obviously has its limitations particularly if you’re not a spreadsheet whizz. Are there any low cost platforms that track past cash flow as well as accurately forecasting future cash flow (and allowing for manual input of sales pipeline)?

Appreciative of any help!

Good question. The answer is: there is no simple solution, it is tricky — especially for business owners without a finance background (which most do nto have!). I’d suggest you start with a spreadsheet if you can, but the real challenge isn’t the tool: it’s making time and doing it consistently. Once you understand what you’re tracking and why, then try one of the software tools to see if it lifts the burden. If you have an accountant, they might help — though in my experience, most don’t have the time or patience. I spend a lot of time with clients on this and it’s well worth it. Cash is King.

 

[WaveJumper]

Well theres a lot of pretty good suggestions above I would only add depending on the "size" of income your dealing with this may have a bearing on what you want to use ie if significant you might jump right into something like Xero to the many other systems out there.

I would say if this was the case find yourself a good accountant, don't pick the first speak to several and make sure they understand what you are doing and speak your language.

Get the foundations right from the start at whatever level you are jumping into a business ....... you dont want any hidden surprises coming back to bite you where it hurts.

 

[GLAbusiness]

Get the foundations right from the start at whatever level you are jumping into a business ....... you dont want any hidden surprises coming back to bite you where it hurts.

This

 

[DontAsk]

I have a spreadsheet that shows my balance sheet and profit and loss as the year goes on. I originally created it so as there would be no surprise at year end when my accountant does it for real from other data. I simply created a line that calculates what cash I currently have, what's owed to me and what I owe in the future.

It's a rough and ready calculation of what "free" cash I have at any time but does not account for potential income from future orders. It would be easy to add a forecast for that but I always assume the worst (no more orders).

 

[Chris Ashdown]

Quickbooks.co.uk offer full accounting for small companies and self employed at about £2 up to £5 per month. long established company with plenty of customers 6.5 million according to web site

 

[Lisa Thomas]

I can recommend a bookkeeper if you decide to outsource this.

 

[StrategyDoctor]

Well theres a lot of pretty good suggestions above I would only add depending on the "size" of income your dealing with this may have a bearing on what you want to use ie if significant you might jump right into something like Xero to the many other systems out there.

I would say if this was the case find yourself a good accountant, don't pick the first speak to several and make sure they understand what you are doing and speak your language.

Get the foundations right from the start at whatever level you are jumping into a business ....... you dont want any hidden surprises coming back to bite you where it hurts.

Accountants are not normally reliable (or maybe 'cheap') for managing your cash flow. If I am wrong please share as they will be very popular

 

[StrategyDoctor]

I can recommend a bookkeeper if you decide to outsource this.

I am interested, but before you share, how will the bookkeeper help manage my cash flow forecast and roughly what will they charge per week?

 

[Ozzy]

how will the bookkeeper help manage my cash flow forecast

This is something I expect and do receive from my bookkeeper. My SLT feed in on a monthly update on business activities, expectations in shifts in business, and they update the forecast as part of the monthly MI pack.

 

[WaveJumper]

I was not necessarily saying someone should rely on an accountant to monitor ones cash flow, but one would hopefully expect them to point one in the right direction in what to claim, what not to claim, what perhaps can be written off, maybe even losses from previous years, putting funds in company or maybe even taking out. Especially if just starting out ....... get the foundations right

They may even have software they recommend to clients and even offer discounts on monthly subscriptions. With said software it very easy to make up any report YOU like, you can look at it daily, weekly blah blah blah

Amongst other things the way I see it, these tools are there to help you take and keep control of your business be it daily, weekly or whatever, in my cooperate days if I didn't know what was happening on a daily basis I would have been shown the door.

You cant make proper decisions on your business if you don't understand where it stands on any given day.

Mind you there's been many a thread where people have got to the end of the year and wonder why they cant pay the bills

 

[Chris Ashdown]

Whilst Cashflow is very important so is knowledge of what items are selling, and what are not, wrong stock control can cost you a fortune in dead stock that could be spent on other things. which is a area where Excel based systems are only part of the information, where as software makes life so much easier for companies dealing in selling stock items

 

[GLAbusiness]

I was not necessarily saying someone should rely on an accountant to monitor ones cash flow, but one would hopefully expect them to point one in the right direction in what to claim, what not to claim, what perhaps can be written off, maybe even losses from previous years, putting funds in company or maybe even taking out. Especially if just starting out ....... get the foundations right



You cant make proper decisions on your business if you don't understand where it stands on any given day.

If you cant measure it - you can't manage it

 

[Lisa Thomas]

I am interested, but before you share, how will the bookkeeper help manage my cash flow forecast and roughly what will they charge per week?

I suspect it will depend on different criteria and prices would vary between different providers so you would need to ask them for a quote

 

[Chris Ashdown]

To me with modern accounting software its far better that you do it yourself and gain a fully understanding of your accounts at any time.
Todays accounts including cash flow is far more useful than last months situation. Just have a accountant for advice and year end
Modern accounting software is so quick to lean and if done regularly takes minutes rather than hours

 

[stevel61]

I think the main question to be asked here is, when you are talking about cash flow are we talking about the accounting system predicting next month's cash flow based on the current data like outstanding sales and and expense invoices or are talking about cash flow forecast over a 12 month horizon or longer based on an annual p&l forecast. I think the only way to really have a short term and longer understanding of cash flow is where you have a rolling forecast and the actuals are updated over the forecast from the system on monthly basis and the forecast recalculates automatically. Anyone who remembers Sage Financial Forecasting and its automatic linking to Sage 50 will know what I am talking about