Fear of the unknown, the cost-of-living crisis, and rising inflation has accountants and SMEs looking to prediction technology for insights into the future. However, some prediction software out there isn’t all it’s marketed to be.
Get the facts straight here and find out why most prediction software isn’t up to scratch.
The pitfalls of AI
A lot of forecasting technology depends on AI. While AI technology has come on leaps and bounds over the past few years, it can’t think like an accountant.
AI is well trained to look for patterns and copy them. A peak here and a trough there become reflected in its future forecasts.
Ok, well how’s that a problem? Well, take VAT for example. AI picks up how much VAT was paid before and repeats it. It does this simply by repeating the pattern without taking anything else into consideration. It doesn’t process VAT as a calculation of actual and predicted activity. This means that the cash flow predictions it comes up with are going to be inaccurate, especially if you’re a seasonal business where VAT can vary a lot throughout the year.
So, Wall-E can’t help us just yet…
Cash flow only… Seriously??
A lot of ‘prediction software’ on the market can only process your cash flow information. Cash-flow-only software reports everything gross with VAT. This makes it very hard to track the real performance of sales and profitability. They often can’t accurately predict the impact on cash during each VAT return.
While a lot of cash flow software out there can look at the due dates of invoices and bills, they don’t predict when they will be paid. As anyone who has owned a business and chased an invoice will know, there’s a big difference between when someone is supposed to pay, and when they do pay. Likewise, there may be clients who always pay early. Most prediction software cannot account for these trends.
But that’s just cash flow, what about the profit and loss statement, and the balance sheet, and KPIs?... Exactly! Cash flow is only a small part of the picture, and cash flow prediction only tells part of the story. You wouldn’t do a jigsaw with half the pieces, so why subject your business or clients to the same treatment?
Bolder, flexible, more reliable prediction technology is needed to give you the most comprehensive and informed predictions.
Futrli offers incisive 3-way forecasting to make confident predictions about your business. Due invoices & bills, profit and loss, predicted cash flow, tax, and accurate auto-predictions are used in conjunction with one another to create a live image of your business’ future.
You need maths that thinks like accountants
Futrli uses algorithms to give the best, most reliable, information. These algorithms are based upon accounting rules and logic and therefore the numbers you see mean something.
Unsure of how Futrli came up with a number? All this reasoning and logic can be spelt out for you, in simple no-nonsense language, at the click of a button through the Assistant. The Assistant tells you where these numbers come from, the trends in your accounts, and any cash movements in invoices and journals.
In less time than it takes to boot up an Excel document, the algorithms process your business or client’s information by linking to Sage, QuickBooks Online or Xero. Each nuance is understood perfectly, calculating VAT accurately, recognising differences between accounts and pulling transactions apart.
Dig deeper into the raw numbers without having to lift a finger. Have a team of virtual CFOs work for you all day, every day, with Futrli.