Tools of Financial Forecasting

As a business owner, there may be nothing more important to to get a handle on your company’s future cash at hand, several tools are available to help you analyze projected income and expenses. They range from rudimentary spreadsheets to slick visualization apps. Here are five tools that can help you forecast your figures.

1. Templates

For some, there’s nothing like rolling up their sleeves and getting their hands dirty with an Excel spreadsheet. If this is you, here are some templates you can use to get you started. Futurpreneur Canada provides a cash flow template that will cover everything from outlining startup costs through to projecting cash flow month by month for two years.

SCORE, a network of business mentors created by the U.S. Small Business Administration (SBA), has its own cash flow and financial projection

Templates to help project cash flow over a 12- month or three-year period.

2. QuickBooks cash flow projector

The desktop version of QuickBooks offers short-term cash flow predictions via two features. The first, cash flow forecasting, uses outstanding invoices and bills in the accounting system to tell you what your cash at hand will look like over the next month or so.

Alternatively, you can use the cash flow projector tool included in some desktop versions of QuickBooks. This lets you analyze your historical accounting data and tweak it with your own manual adjustments, while also taking in accounts payable data.

QuickBooks cash flow projector will only project out for the next six weeks. If you want a longer-term view with extra goodies, you’ll need something with more power.

3. Float

While some accounting packages might give you basic cash flow forecasting, there’s a lot to be said for a best-of-breed solution that does one thing well. Float is a dedicated cash flow forecasting system that integrates with QuickBooks and with two other popular online accounting packages, Xero and FreeAgent.

Float imports accounting data directly from those packages, using them to generate cash flow forecasts on a daily or monthly basis. Its “what if” analysis tools show you what happens to your cash on hand over time as you play with parameters, and also lets you create multiple scenario layers showing what would happen in different events, such as taking on a new employee.

The online tool includes budgeting options that let you describe how your business will spend its cash, and then tracks those budgets throughout the month.

4. Dryrun

Dryrun also takes input from Xero and QuickBooks to let you track your forward cash flow. It lets you track partial payments, and allows you to collaborate with employees and business advisors so that they know your position.

This system includes another feature: sales forecasting. It draws data directly from web-based CRM tool Pipedrive, so that you can factor potential deals into your cash flow forecast, making it more accurate.

Sales is just one part of the cash flow puzzle. What are you spending on? Dryrun’s budget system offers the ability to define your own categories and create auto-repeating budget items that you can view in varying levels of detail.

DryRun’s what-if modelling system lets you compare multiple scenarios together at once, using multiple data points in each forecast.

5. Pulse

Pulse lets you monitor existing cash flow on a weekly or monthly basis, and project future cash flow using tools to estimate the effect of a new project or expense on your cash at hand.

Input data from QuickBooks automatically to cut down your workload, and then use it to visualize cash flow in a series of reports. This tool also does cash flow tracking in multiple currencies for those doing business internationally.

With Pulse, you can set user accounts at multiple levels, ranging from Owner down to Read Only, with varying levels of access.

Whichever tool you use, the secret to accurate forecasting lies in accounting for costs and income as accurately as possible. Being honest about your financial expectations is a key requirement in cash flow planning. If you can pull data from your accounting system, then you’re already off to a great start.