In any business, cash is king. Forecasting when a business will receive or need to make a payment is vital for uninterrupted functioning.
Planning this flow helps a small business owner carefully map expansion and growth, without overstretching resources and miscalculating profits. A cash flow forecast shows if a firm needs to borrow, how much the amount should be, when the transaction should take place, and how it will repay the loan.
Besides this, cash flow forecast helps spot problems with customer payments, identifies potential shortfalls in cash balances and makes sure that the business can afford to pay its employees and suppliers.
Since this is such an important discipline of financial planning, here are the five important tools you must use for forecasting cash flow of your business.
#1 Google Docs
Google Docs will help you learn a lot more about your money. You will save tremendous time and effort when applying this free and easy-to-use mechanism. It can be customized to create a layout that serves you and your business needs best.
Hate to use intermediating spreadsheets? Cash flow forecasting tool, Float, comes to your rescue! By using Float, you can easily connect your accounting software for simpler and accurate predictions. Float, with its budget bars, transaction notes and clean reports, gives you complete control and clarity on your cash flow forecast.
PocketSmith is a calendar-based cash flow forecasting software that shows you upcoming expenses and helps you avoid making accidental financial mistakes. PocketSmith assists you in understanding your current spending patterns, helps you gain control over your money and assess your future finances.
Another popular cash flow accounting tool, Dryrun, has the capability to build a powerfully flexible budget that is easy to understand and projects a 360 degree view of your financial future. Its strength lies in its automated as well as manually controlled forecasts. It is custom built and can offer you live online support during business hours.
#5 Cash Flow Template
Cash Flow Templates include an Accounts Payable spreadsheet and an Accounts Receivable spreadsheet, the two of which are combined to create a Cash Flow Template. These spreadsheets update data between themselves automatically and lead to accurate financial predictions.
An effective cash flow forecast can help companies manage operations and reach business goals by tracking expenses and creating financial forecasts. Make it a habit to use some of the above cash flow forecasting tools to keep your company’s budgeting process straightforward and streamlined, so that it can meet your business’ needs.