How cash flow forecasting software transforms financial planning

Here's a real financial toll for CFOs trying to manage their cash position without the right cash flow software. Particularly damaging for businesses is a lack of accurate forecasting capability over both the short and long term.

Without cash flow forecasting software, mid-sized companies in the UK are missing out on an estimated £600,000 in financial income every year - as well as notching up 91% higher overdraft fees. That's one of the many findings of Agicap's 2024 Mid-Market Survey. As experts in cash flow forecasting software, Agicap was not surprised to further learn that 63% of surveyed companies did not even have access to a daily cash forecast.

If businesses do not have cash flow projections they can trust, how can they be expected to make informed decisions?

What is cash flow forecasting software?

Cash flow forecasting software ensures that businesses can make accurate predictions about their cash position. That means knowing what the situation is going to be tomorrow, as well as far into the future.

• Short-term cash flow forecasts mean businesses get better visibility on their cash. This means they can make better decisions around where cash needs to go, resulting in numerous efficiencies with inflows, outflows and balancing operations.
• Long-term cash flow forecasts allow for liquidity forecasting - ie. ensuring the business will have enough money to pursue its long-term goals - which, in turn, underpins all top-level financial planning.

Desktop cashflow forecasting is the most powerful format for business cashflow software, with smartphone forecasting apps providing a leaner level of support for team members on the move.

Cash flow forecasting software can be provided as an add-on module to existing business cash flow software, or - as with Agicap - be a powerful central element.

Key features of modern cash flow projection software

Here are ten key features of top cash flow forecasting software:

1. Real-time cashflow data visibility

The Holy Grail that every CFO and CEO seeks: what is our exact cash position right now? Many cash management solutions promise it. Agicap is certainly one solution that actually delivers it, and that's down to the whole package being orientated around cash rather than in-depth Treasury risk management functions, for example, or massively complex spend management provision.

2. Forecast using scenarios

Scenario planning in cash forecasting means finance teams can plot best and worst case scenarios, and see what the outcomes for cash would be in the short, medium and long-term. A great feature available on advanced cash management platforms, and ideal for stress-testing.

3. Automated integration of data

Without connecting to other accounting tools as well as in-house ERP systems, a cash flow forecasting system will not have much data to go on. For rolling forecasts and live cash position updates, the cash flow projection module needs to be refreshing data feeds continuously.

4. Management of multiple entities

The larger accounting packages (as well as ERP systems) offer the ability to consolidate finances across a group. Software like Agicap allows you to switch - with one click - from a consolidated group view to a detailed view of each entity's cashflow.

5. Cash flow categories and tags

Teams can customise their own cash flow projections with unique tags for inflows and outflows (marking up rent, payroll, payments from a particular client etc.) The top forecasting packages make this easy with drag-and-drop tools.

6. Import/export flexibility

Whilst Excel spreadsheets may be time-consuming dinosaurs, companies still use them and need them. Top cash flow forecasting software makes it easy to import any spreadsheet, as well as customise exported reporting formats. The more advanced the software, the more ways there typically are to bring in and send out data formats.

7. Alerts

Set desktop alerts for significant changes in key levels; including high variance between actual and expected inflows and outflows, delayed payments, low cash levels etc.

8. Custom dashboards

Want to create particular financial perspectives and freeze them in time? No problem with custom dashboards. With packages like Agicap that are heavily-invested in collaboration tools, you can:

• First set up a custom dashboard view on any of a variety of topics (banking pool, cash burn, variance, indebtedness, investments, DSO etc)
• Then access the dashboard from the Agicap mobile app on your smartphone ...
• Or share the dashboard electronically with any stakeholder

9. Multi-currency support

If your business (or group of business entities) is juggling various currencies, look for automatic currency conversions and consolidation - as well as exportable exchange rates for transparent auditing.

10. Rolling forecasts

You might think that rolling forecasts come as standard, but they do not. With the more powerful cashflow forecasting systems, forecasts automatically update as new data arrives as well as extends its own temporal scope.

Benefits of using cash flow forecasting software

There are tactical and strategic benefits to using forecasting software.

Strategically, it is impossible to make informed decisions about company/group direction without having a clear view of the future financial landscape. This view will not be perfect. But, without it, the CEO and Board cannot plan key strategic actions (like M&A or changes in market focus) or financing actions like taking on debt/making investments.

Tactically - ie, in the area of day-to-day operations - cash flow forecasting creates numerous efficiencies in terms of optimising cash allocation across the whole company. Naturally too, overdraft fees are avoided and, with cash surplus identified and pooled, investment opportunities can be taken.

Types of cash flow forecasts (short-term vs long-term)

How to choose the right solution for real time cashflow forecasting

• Assess your business size, complexity and existing tech stack.
• Identify a software solution that is compatible with your accounting and ERP systems.
• Prioritise solutions with customisable dashboards, collaborative features and scenario planning; as these are universally useful features, whether your business needs them right now or not.
• Pivot on whether you need multi-entity management or not; if so, you need to go with an established expert in this field (like Agicap), or an enterprise-scale solution that will offer the management of multiple entities as standard.
• Evaluate pricing and scalability.
• Trial a few platforms to see what works.
• Implement your chosen solution - prioritising firms that offer real implementation support and training.

Cashflow management software: best practice for implementation

It is a lot easier to implement Agicap than a traditional Treasury Management Solution. And, whereas a TMS might offer more depth on commodities and currency risk, Agicap's centering of cash makes it hugely popular outside of Treasury with CEOs, CFOs and Finance and Accounting Teams. For Agicap, cash is king - and that works for everybody.

When it comes to implementation, Agicap might take 3-6 months to install and integrate, as well as train key employees. A traditional TMS might take double that. What's more, Agicap's support system centres around a dedicated account manager with average response times to tech queries of less than 2 minutes.

How do I do a cash flow forecast?

Once Agicap is up and running, one of the easiest ways to produce a cash flow forecast is to use the Agicap P&L conversion module.

Just a few simple clerical steps will get this set up - like linking the categories in your P&L to Agicap categories and eliminating non-P&L lines like depreciation and amortisation. Once your bank accounts are synchronised, you will over time be able to compare your budget with what really happened and identify variance hotspots.

Discover how Agicap can transform your cash flow planning by watching this video.

Why use Agicap rather than Excel for cash flow forecasting?

Excel may still be widely used for cash flow forecasting — 26% of companies surveyed in 2024 continue to rely on it — but that doesn’t make it the right tool. Manual input, error-prone formulas, and static data make Excel an outdated solution for today’s dynamic cash management needs. It simply wasn’t built for real-time financial planning, multi-entity visibility, or collaborative scenario analysis.

Agicap offers a smarter, more scalable approach. Instead of spending hours maintaining fragile spreadsheets, finance teams can streamline and automate their forecasting with Agicap — gaining real-time syncing, automated data consolidation, and accurate projections. For teams that aren’t ready to fully part ways with Excel, Agicap’s dedicated plug-in makes it easy to connect your spreadsheets and gradually upgrade your workflow — without losing existing data.

Agicap integrates seamlessly with:

• Spreadsheet software.
• File storage systems.
• Payment solutions (like PayPal, Stripe and Adyen).
• Spend management software (like Spendesk, Zoho Invoice and Pleo).
• 1000s of banks.
• Major accounting software and ERP systems (like SAP, Xero, Quickbooks, Sage and Oracle).

Unlock your business’s cash flow potential with Agicap

Has your business got enough cash right now? In modern times, you would have thought that basic cash management would be easy with the right software. But Agicap's 2024 survey discovered that, on average, UK mid-market companies face 14 significant cash shortages (ie. over £50k) every single year. This is what happens when businesses go without a powerful cash flow forecasting solution. Fortunately with Agicap, the software really is a solution.

AI-powered cash flow prediction

Brought together by powerful machine learning, Agicap provides the most comprehensive approach to cashflow planning that's on the market.

That's because Agicap bases its cash flow forecasting on both direct and indirect methods.

Direct forecasting: from ERP systems comes data based on supplier and client invoices, purchase orders and quotes; debts, investments and payments; aggregation from bank accounts as well as reconciliation with treasury operations.

Indirect forecasting: data used here comes from budgets and our P&L-to-cash converter, and is interpreted using AI and other key cashflow prediction modalities.

On this comprehensive data basis, Agicap can provide a three-tiered perspective for the best cash flow forecasting:

• Short-term cash positioning: daily visibility, weekly or monthly horizon
• Medium-term forecasting: 13-week forecast, weekly visibility, quarterly horizon
• Long-term cash flow plan: monthly/quarterly visibility, yearly horizon

Real-time cash flow data monitoring

Informed decisions around financial planning can only happen with a clear view of cashflow. Because Agicap syncs directly with bank accounts as well as automatically integrates with other accounting software packages and in-house ERP systems, real-time cash flow monitoring is available.

Enhanced cashflow visibility has proved particularly useful to the Scheppach Group - a successful industrial and retail firm with a €400m turnover. Before Head of Finance Peter Konz installed Agicap, the finance team was having to manually co-ordinate 30 bank accounts in 3 countries, spread across 7 banks!

With two hours of employee time now saved per day as a result of implementing Agicap, Konz's view is that "Agicap is exactly the right tool for medium-sized companies that need a quick and intuitive view of their liquidity."

Automated data integration & cash flow optimisation tools

Finance teams like Agicap because there is limitless potential to unify forecasting data. On one single interface, you can:

• Bring together data from operations, financing and investments.
• Take data from multiple business entities and consolidate it at group level.
• Connect your spreadsheets using Agicap's dedicated plug-in.
• Use our dedicated converter software to transform your forecasted P&L statement into the basis of a cash flow forecast.

Multiple scenario planning

A strong suite of Agicap recognised in the industry is our provision of customisable forecasting models. Your finance team can do more than get forecasts based on real-life inputs. You can create and test fictional scenarios to gain valuable intel on possible opportunities and risks: What happens if we hire new staff? Enter this new market? What is the best case for our profitability this year, as well as the worst case?

And to hone your accuracy, Agicap gives you powerful tools to compare actual vs. forecast figures. Your team can build custom dashboards showing your variance analysis so your CFO can explain to the Board exactly what is happening.

Ready to take control of your cash flow?

Unlock the full power of your financial data with Agicap. Whether you're managing daily operations or planning long-term growth, Agicap's advanced forecasting tools empower you to anticipate financing needs, improve accuracy, and adapt in real time. With features like scenario planning, real-time updates, and seamless integrations, you'll have everything you need to make confident financial decisions. Don’t let uncertainty hold your business back—start optimising your cash flow today with a free custom trial.