Cash Flow Forecasting

Cash flow forecasts give a projection of money in and money out and are crucial for understanding how your cash flow impacts your business's performance, financial health, and ability to reach your goals. 

Manual cash flow forecasts, such as those created in Microsoft Excel, are very common, but can have a number of limitations. The manual data entry process means that they are prone to human error; they can quickly become out of date and building in complex calculations can be time-consuming. 

Cash flow forecasting apps solve these problems, while also providing deeper insights into your business and saving you valuable time. There are two main types of cash flow forecasting apps: direct and indirect. 

Direct                                                                                                             

Best for short to medium-term cash forecasting         

The direct method of cash flow forecasting focuses on operational expenses and uses actuals as a basis for forecasts.           

Indirect                               

Best for long-term cash flow forecasting 

The indirect method of cash flow forecasting uses the profit and loss statement and balance sheet as a basis for forecasting. 

Cash flow apps are priced on a monthly basis. 

In this guide, we have selected two of the most popular apps for comparison, however depending upon your needs, despite the limitations noted above, an Excel document can sometimes create a more bespoke solution.