Cash is still king: Embracing Cashflow Forecasting software

May 31, 2024 | Fintech Friday

As an SME, managing your cashflow efficiently is crucial for creating and maintaining financial stability and fostering growth. This is where cashflow forecasting software comes into play.

In this blog, we’ll explore what cashflow forecasting software is, the benefits it can offer to SMEs, and how scenario planning can aid in making informed business decisions.

Understanding Cashflow Forecasting Software

Cashflow forecasting software is a powerful tool, designed to help businesses predict their future cash positions, by analysing both current and historical financial data. The software allows you to create detailed forecasts, anticipate potential cash shortages, and plan for future expenses. Implementing a comprehensive solution like Futrli enables businesses to generate accurate and agile cashflow forecasts, to fit their specific business needs.

Benefits of Cashflow Forecasting software

1. Improved financial planning: With cashflow forecasting, SMEs can create their financial plans for the future, and compare them to the actuals once they happen. This helps in anticipating future cash needs and reducing the risk of any unexpected shortfalls.
2. Enhanced decision making: By providing a clear picture of your cash flow, the software assists you to make informed decisions for potential investments, expansions, and other financial commitments.
3. Stress testing scenarios: A standout feature of the software is the ability to simulate financial scenarios. What if Sales drop by 20%? What if my clients delay payment? Scenario planning helps prepare you for contingencies like this, ensuring your business remains resilient.
4. Time-saving automation: Automating cashflow forecasting reduces the time spent with manual calculations and data entry, granting you more time to focus on the strategic decisions it helps facilitate. Move your cashflow focus from inputting date, to analysing the outcomes.
5. Integration with your Accounts: By having your cloud accounting software integrated with your cashflow, your comparison between forecasts and actuals is seamless. This can be extracted within the software to report on – showing potentially-unforeseen transactions.

Scenario planning: Preparing for the “what-ifs”

One of the most useful and impactful features of cashflow forecasting software is scenario planning. This function allows SMEs to model different financial situations and their potential impacts. Here’s how you can leverage this function successfully:

1. Identify your key variables: Determine the critical factors that influence your cash flow, such as your sales volume, payment terms, margins and operational expenses.
2. Create multiple scenarios: Develop different scenarios based on foreseen potential changes in these variables. For example, you could produce a baseline forecast, but then elaborate on this with both best- and worst-case variables.
3. Analyse outcomes: Assess the impact of each scenario on your cash flow. This can involve overlaying the results against your baseline, and help you understand the potential risks and opportunities associated with each situation.
4. Develop action plans: Based on the scenario analysis, create action plans to address potential challenges or capitalise on opportunities. This proactive approach allows you to mitigate risk and can significantly enhance your business’s resilience.

How Harold Sharp can help with Cashflow Forecasting software implementation

Choosing the right cashflow forecasting software and implementing it effectively can be a complex process. At Harold Sharp, we can guide you through this journey, ensuring you’re maximising the entirety of the software. Whether you have an offline forecast already, or are looking to introduce this to your business – here’s how Harold Sharp can assist:

  1. Software selection: We can help you choose the most suitable cashflow software to align with your business. This can be dependent on industry, current process, or even how your revenue is structured.
  2. Data integration: Our team can create the integration and framework between the cashflow software and your core accounting data.
    3. Customisation and setup: We’ll assist you in setting up and customising the software, to create the detailed reporting requirements and insights that you want for your business.
    4. Training and support: We can provide the training and support your team needs, ensuring they are proficient in using the software and can leverage its potential. We appreciate that this level of software isn’t an overnight change for your team, and so ongoing support is available.
    5. Scenario planning guidance: Harold Sharp can work with you in understanding and manipulating the insights the software provides, with a great track record of providing the outsourced Finance Director role for many clients.

Get in touch

Implementing cashflow forecasting software can help SMEs supercharge their decision-making. It not only provides a clear view of your financial future, but also allows you to prepare for uncertainties, and drive your business towards sustainable growth.

By embracing the technology out there, businesses can now map their financial future with confidence and agility.

For more information, contact our digital advisory team by emailing, call 0161 905 1616 or contact Ryan below.

Ryan Alderson, Head of Digital Advisory
T: 0161 905 1616
DD: 0161 926 0512