The best cash flow forecasting software in 2023
Cash flow forecasting software is an important tool for companies to manage their cash flow optimally and to avoid cash shortages. In the UK market there is now a wide range of tools with which such forecasts can be made. Here we present three of the best tools.
|Retrieves account transactions in real time, categorises cash flows automatically, cash flow forecast on a daily, weekly and monthly basis, scenario planning||Integrations with many accounting and financial management apps for even more accurate forecasts, consolidation of affiliated companies|
|Fluidly||Connects to Xero or Quickbooks and retrieves accounting data from there, creates forecast based on accounting data, creates scenarios, finds financing offers on request, Assists with receivables management||Cash flow management in real time, fast financing solutions|
|Quickbooks||Accounting software suite, synchronisation with bank accounts, tagging of transactions for better overview||Cash flow overview of the last 24 months, forecast up to 24 months|
Agicap retrieves account transactions from all corporate accounts in real time and clearly displays income and expenses on a dashboard. Deposits and withdrawals can be individually filed in categories, where recurring transactions are then automatically sorted. This enables efficient cost control as well as revenue tracking.
Recurring income and expenses are projected into the future in the planning tool. All other expected income and expenses can simply be entered into the planning at an appropriate date. Based on this data, Agicap creates a cash flow forecast - on a daily, weekly or monthly basis.
Agicap can also be connected to many other accounting tools (e.g. Quickbooks) and retrieves the relevant data from them, which it also transfers to the forecast. Due invoices, for example, are transferred to the forecast on a daily basis, which gives an even more accurate picture of the future cash situation.
Fluidly is a cash flow forecasting software that connects to the very popular accounting suites Xero and Quickbooks. From there it retrieves the cash flows and displays the cash situation clearly. Based on the past cash flows, Fluidly creates a forecast in which further expected income and expenses can also be entered.
With the help of the planning function, different scenarios can be created. You can either use prefabricated templates or create your own scenario from scratch.
A useful feature is the "Fund" option, which searches for financing offers if a company needs a loan. To filter out an optimal offer, Fluidly uses the cash flow forecast as input.
Check out our in-depth guide to putting together a financing plan
Quickbooks is an accounting suite that offers cash flow management in addition to accounting functions such as invoice management. The tool automatically connects to the company's bank accounts so that the cash flows are always up-to-date.
The individual cash flows can be individually tagged so that the income and expenses can be sorted into different categories, which simplifies the overview and cost control.
Forecasts can be made for up to 24 months into the future. For this purpose, recurring income and expenditure are extrapolated. The more past data available, the more accurate the forecast.
Xero cash flow planning software can be used to forecast cash flow for UK businesses. At its core, Xero is an accounting software to help small businesses take control of their finances. It's perfect for tracking your business's income and expenditure and creating a cash flow forecast with a few easy clicks.
This solution allows your accountants to automate mundane accounting tasks, such as reconciling bank transactions with their financial records, sending invoice reminders to your clients and consumers, and curating charts and reports of reconciled transactions.
Moreover, all your financial and business data is stored and secured in a single place, making it hassle-free for you to trace your business's analytics and collaborate with your accounts team. This feature is especially helpful for scattered teams.
Xero is extremely flexible and allows you access to your data from anywhere, at any time, and on any device with its mobile app. You can also pay your employees, file VAT returns, pay other bills, claim expenses, accept payments in multiple currencies, send quotes, integrate apps, manage your inventory, and monitor individual projects.
Float is an award-winning cash flow forecasting software that gives you real-time updates about your cash flows so that you can make future strategic decisions with conviction.
It easily integrates with your cash flow analysis software, such as Xero, QuickBooks, and FreeAgent, to make managing your finances effortless. It answers all your cash flow forecasting-related questions and offers actionable insights to link your bills automatically, invoices, and actual cash outflows with your budget.
It also doubles as a cash flow budget software and enables you to import your Excel inputs. With Float, you can create multiple scenarios for sales increase, seasonal planning, and unanticipated expenses. You can export your budget forecasts as PDF and CSV files to instantly share them and generate variance reports to compare your forecasted budget against the actual figures.
You can foresee multiple project scenarios to be prepared for all outcomes and view the short and long-term impacts of your expenditures. This solution's customer support team will ensure your queries are effectively resolved.
If you want to create your cash flow forecast completely free of charge, you can use Excel, but this has a decisive disadvantage: This method is not real-time capable. Account transactions have to be entered manually in a table and a forecast created from them. This is time-consuming and the forecast is rarely up-to-date because cash flows change constantly.
Some providers make their cash flow forecasting software available for free. Mostly, however, with a limited range of functions or within the framework of a trial period, after which the user must switch to a payment model. If you want to have a cash flow forecast that is as accurate as possible, that is always up to date and that you do not have to invest a lot of time in creating, cash flow forecasting software on a paid basis is the best choice. In addition, users can also contact support at any time if there are problems.
Yes, Xero provides a short-term (weekly or monthly) cash flow forecasting tool. You can access it from the dashboard as part of your subscription. It projects your cash flow based on the bills you must pay and invoices you might get paid for. You’ve got the option to switch your bank accounts and the time frame of the projection.
Remember, to get an accurate cash flow projection, ensure that your bank accounts are reconciled, and your transactions are dated within your chosen forecast period.
Though Xero’s cash flow forecasting tool is an excellent option for small businesses, the short time frame makes forecasting cash flow for the coming quarter or year impossible. Additionally, you don’t have the option of planning for multiple scenarios to develop an airtight financial strategy.
Free cash flow (FCF) is a type of cash flow you can determine using your cash flow statement. A business usually calculates its FCF to determine the revenue they’ve left over after all the expenses have been accounted for.
It often serves as surplus capital the business can use to pay off its loans, dividend to its shareholders, and interest to its creditors, or it can invest the amount to grow the business and invest in its research and development capabilities.
Free cash flow calculation helps you understand how effectively your business processes generate revenue. Besides helping you manage your capital efficiently, free cash flow will also let you make sound business decisions to attract potential investors.
To calculate the free cash flow of your business for the forecasting period, you first need to find out your current cash flow. You can do that by inputting the following formula in your cash flow spreadsheet:
Free cash flow = Cash from Operating Activities - Capital Expenditures (CapEx)
Suppose you want to forecast your free cash flow for the next quarter, financial year, or decade. In that case, you’ll have to assume your current growth rate will hold true. You’ll also have to project other components required for calculation, such as fixed and working capital investments, EBIT margin, and other non-cash expenditures like depreciation.
Based on the above assumptions, you can input the following formula in your cash flow spreadsheet to forecast free cash flow:
Forecasting free cash flow = Net Revenue - (Fixed Capital Investments - Depreciation) - Working Capital Investments + Borrowings
An accurate cash flow forecast will give you a clearer picture of your capital and help you make informed decisions that will impact your business, such as opening new stores, hiring more employees, or investing in research and development.
Learn more about making a cashflow forecast in our video tutorial:
You can either use software for real-time cash flow forecasting or project it in-house after taking your forecast time period, total cash income — from sales, tax refunds, investments, grants, and the like that you’re sure to receive for the forecast period, total expenses — raw material, salaries, rent, tax, and the like that you’re sure to incur, and deduct the total inflow figure from the outflow amount.
A positive figure will mean you generate more than you spend, whereas a negative figure will mean you spend more than you generate. This will give you deep insights into your cash position and inform you if you should become conservative with your spending or invest your cash surplus in expanding your business.
Cash flow forecasting in project management helps project managers understand the cash inflows and outflows of the project and allocate resources when required.
They can use this projection to manage financial resources per the expected returns, identify potential budget and over-expenditure issues, and account for other contingencies to ensure the project remains on track and within budget. It also serves as a benchmark for future projects.
QuickBooks, a cash flow management software, allows you to forecast your cash inflows and outflows. Its automated cash flow forecasting process considers your expected income and expenditure and notifies you if you’re in danger of running out of cash up to 90 days in advance.
Which is the best cash flow forecasting software always depends on the demands and needs of the company. Here we have presented three of the best cash flow tools, all of which fulfill the minimum requirements for good cash flow management software:
- They are real-time capable
- They represent the current cash situation
- They represent the future cash flow
Those who need other accounting functions besides cash flow management will find what they are looking for in Quickbooks. The software is aimed primarily at small companies where financial management is handled by the managing director or where there are not many employees in the finance department.
Fluidly requires the accounting suites Xero or Quickbooks from where it retrieves the cash flows. It offers a wider range of functions for creating cash flow forecasts than Quickbooks, because it also allows scenario planning.
Agicap is a dedicated cash flow forecasting software that offers the most functionality compared to Quickbooks and Fluidly. Since it can be connected to numerous accounting tools, the forecast is very accurate because data from many sources is used to create it. Agicap is suitable for both small and medium-sized companies that have the highest demands on their cash flow management.
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