CAshflow forecasting software


I'm looking for recommendations on cashflow forecasting software.  I shall be doing a 5 year cashflow forecast with P&L and Balance sheets and with the function of 'what of' scenarios/sensitivity analysis and be able to enter inflation/cost uplifts

thanks in advance

Replies (10)

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By David Ex
20th May 2022 15:34

Definitely a question that’s been asked twice in the last month if you search the site.

By DKB-Sheffield
20th May 2022 16:00

Agree with David Ex... definitely covered many times before.

Clearly the biggest factors will be:

- Your budget
- The business size
- The business complexity
- The users of the forecast
- The time you have for set up
- The time you have to manage it

Recommendations can go from Excel spreadsheets (free, or relatively low-cost Fiverr jobs) to all-singing, all-dancing, industry specific/ bespoke alternatives (£1,000+ pcm).

Unfortunately, your question doesn't really lend itself to providing much in the way of helpful advice (you will likely get many recommendations but, are any relevant). It may be an SME with 1 income stream. It may be a large multi-national with subsidiaries, branches, departments and multiple revenue/ cost centres?!

The key principal is, as always... decide what you need/ want/ would like/ can afford (time and money) and explore the market accordingly. Cashflow forecasting requirements are very rarely the same from one business to the next!

By memyself-eye
20th May 2022 17:46

Five year forecast?

Replying to memyself-eye:
By DKB-Sheffield
20th May 2022 17:54

I wouldn't disagree!

To be fair, I see anything over 12 months as being aspirational - particularly with line-by-line analysis included.

Still, it doesn't stop lenders from requesting them (even for some smaller companies). I've rarely known a lender come back 2 years in asking 'why' the multiyear forecast was so inaccurate though!

Replying to DKB-Sheffield:
By Hugo Fair
20th May 2022 20:12

Personally I blame the name ('forecast') for the suggestion that it will help you determine the future outcome ... which is how it's usually portrayed (by said lenders and the infamous Dragon's Den).

What I *have* found it very useful for is as a planning tool, particularly if you use it to reverse the process (i.e. what would that target require of other factors?) ... so you can flex your 'what-ifs' and, most importantly, identify the relationships between operational factors (not all of which will be under your control).
You may even end up identifying different goals (more profitable or more timely or whatever).

Why am I wittering on about this? Because in order to get those benefits you have to be prepared to go on a major learning expedition - and to keep re-tweaking your model in the light of insights that you gain along the way.
So the antithesis of a 'package' that you pick off the shelf ... and I agree that there is none better than Excel plus the aforementioned days if not weeks of hard grind (thinking & developing) in constant iteration.

Unless of course all you want is a 'forecast' that 'proves' whatever outcome your lender/investor seeks!

Replying to Hugo Fair:
By DKB-Sheffield
20th May 2022 20:50

Oh, I'm not knocking the benefits of forecasting. Just that many (most non-accountants for example) don't actually realise what a forecast IS (or should be) and how much needs to go into doing one correctly!

In my years as an FM it was most of the job to forecast, budget, reverse-forecast, dropthru analyse, variance review... repeat. 'Accurate' forecasting was essential for control - and as you rightly say, identify opportunities.

The "template" (bespoke or bought) is useless if the correct personnel and the significant amount of time is not built into the equation. Can an accountant forecast - with any degree of accuracy - what sales will be in 3 years without there being a strategic sales framework or business plan prepare by, or with, the sales team? Can cashflow be assessed without the premises manager highlighting the expected building rennovation/ repair costs*? Is there any possibility of projecting staff costs if HR has not announced their intentions to contract-out the entire production team? The answers are invariably 'no' but, you get some funny looks when you ask the floor managers to help with forecasting!

So often the views of businesses (small... and in some cases, large) is that business plans and forecasts are simply a case of sitting down with a spreadsheet for a couple of hours. "Do payroll, process AP, chase some debts, pay some suppliers... and just knock up a forecast".

A forecast that is ill thought out, ill researched, and ill planned, is little more than a guess! No software around is going to cut out the real hard work and, without the flexibility and adaptability offered by a trusty Excel (others available) spreadsheet, off the shelf packages may well make things harder!

* I had an instance where I'd prepared a decent 12-month forecast. The Facilities Manager discussed all expected costs. When I presented the figures to the MD he was delighted that, even with the significant repair bill, there would be a profit. "Which repair bill?" I asked. "The building repairs" he said. I was confused until I probed further and found there were major works scheduled (Grade 2 listed, so you can guess they weren't cheap). When I explained I hadn't factored them in, the MD was red in the face (anger), I was red in the face (embarrassment) and the FM was also red in the face (best not to go there!).

Replying to DKB-Sheffield:
By Hugo Fair
20th May 2022 21:24

And I thought it was only me for whom the whole area brought back bad memories (from when in the late '80s I had an MD like yours).

Mind you I did eventually convert him (not to the details which were not his strong point), but as a 'blame allocator' (his words not mine).
I re-labelled some of the models to things like the Product Change Management Process (basically a massive spreadsheet that encompassed every affected dept from Research to Production and from Sales to Support and so on ... over the life-cycle of a new product from concept to peak profitability).
What sold it to him (and hence his nickname for it) was my suggestion that each budget holder would have to 'sign-up' to their portion of the plan ... allowing me to focus on exception/variance reporting.
It was remarkably successful - even if I suspect this had more to do with the fact that everyone had to spend more time thinking about & understanding their role than had been typical beforehand.

Anyway, it's the weekend - so enough of the past!

Replying to Hugo Fair:
By DKB-Sheffield
20th May 2022 21:45

Have a good weekend!

By D V Fields
20th May 2022 19:37

There is a great little product called Microsoft Excel.
It has never let me down.

By John Toon
24th May 2022 11:03

Excel and/or Castaway