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Everything You Need to Know About Cash Flow Forecasting in the Cloud

Posted on 2nd June 2016 in Cash Flow

Written by Amy Harris

Your cashflow forecast is a critical business management tool. Cloud accounting gives you the freedom to update your forecast with live numbers as soon as they’re available.

A cash flow forecast is integral to the success of your business. Even if your business is profitable on paper, you need cash flowing into the business faster than it’s flowing out. If it doesn’t you will very quickly find yourself in a position where you are unable to pay your suppliers or your staff, so the best way to safeguard against financial ruin is to create a cash flow forecast.

A typical cash flow forecast is divided into receipts, outgoings and a monthly cash balance or cash flow statement (which should equal to the amount of cash in your bank account).

The traditional method of business forecasting has been to rely on spreadsheets, word documents and even bank statements to compile the necessary figures and put together projections. This is not only incredibly time-consuming for a small business owner, often tying the key business driver down to the back room and swamping them in admin rather than allowing them to focus on running the company, but it is also prone to human error, and relies on a good level of mathematical understanding.

FUTRLI simplifies cash flow forecasting and budgeting to the cloud. Designed to be straightforward and easy to use, you can be up and forecasting in just a few minutes.

Why cloud accounting isn’t just pie in the sky

Cloud cash flow forecasting takes the headache out of future accounting, and does all of the work for you (both the hard and the easy). Updating your forecast with real-time figures as soon as they’re available, the forecast becomes your actual cash flow position as you go through the year. The process etc is all created for you – you are not starting from scratch with a blank spreadsheet

Cash flow planning helps you to keep track of your finances so that you know exactly how much cash is flowing into and out of your bank account on a day-to-day basis. It helps to determine when you can expect to get paid, and when you need to pay your own suppliers.

The beauty of cloud forecasting is that it also enables business owners to create some ‘what if’ scenarios to measure the impact of, for example, a five per cent dip in sales or a 10 per cent increase in costs, to help you build some contingency into your figures. It means doing away with time-consuming spreadsheets and tapping into quick and easy scenario planning for the unforeseen or seasonal changes. And because it is working off real-time data it also means that your forecast is always up-to-date.

Are my finances safe in the cloud?

For many businesses owners who are used to traditional accounting software, the idea of relying on cloud accounting can be a daunting task. What exactly is the cloud? Is it safe? And why does it offer business owners, both large and small, so many benefits?

The best example that answers all three questions is internet banking. Every time you log on to your online bank account you are accessing ‘the cloud’. It is a platform that makes data and software available online at anytime, from anyplace, using any device that has an internet connection.

With cloud software security is airtight, and no one else can access your data unless they have a login to the online account. In the event of a fire at your business premises, or if your laptop is stolen, all of your financial and operational data is safe, secure and unaffected. The daily running of your business may be impacted if stock is damaged or buildings are deemed unsafe, but the vital data concerning your business remains untouched and up-to-date. As long as you have access to the internet, you can be up and running again with immediate effect.

The benefits of working in the cloud

Flexibility is key to running a successful business, and cloud cash flow forecasting gives you the freedom to run your business from work, home or on the go. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are.

Automatic updates are free and can be developed and delivered faster and more easily in the cloud. This eliminates the hassle of needing to install the latest version, and you will have instant access to new features as and when they are developed, not to mention more time focused on growing the business.

Multi-user access makes it easy to create collaborative forecasts online with your team and advisors, even between offices in the UK and Australia, and you can rest safe in the knowledge that it is all being automatically backed up.

FUTRLI has been designed so that anyone who runs a business can use it to plan their future cash flow. There are forecasts that cover everyone from sole traders right through to larger finance teams. And it is designed with your accountant in mind too.

Your cashflow forecast is a critical business management tool. Cloud accounting gives you the freedom to update your forecast with live numbers as soon as they’re available, scenario plan for all possibilities, as well as the option to run your business remotely, from anywhere in the world. And when data is at your fingertips, the possibilities are endless.