In simple terms, Cash Flow Forecasting involves the creating of a listing when a person or firm would spend money in the future. Business Dictionary explains it as an “estimate of the timing and amounts of cash inflows and outflows over a specific period”.
In a business world that is very competitive, running out of cash can be very catastrophic to a firm, particularly small enterprises, and start-ups.
Why? Simply because Cash Flow is what makes businesses live. Often, when firms run out of cash, insolvency sets in. If these companies cannot get loans to rejuvenate their operations, that is the sad end to the business.
However, in a fast-growing world, businesses and accountants are beginning the importance of Cash Flow Accounting. Accountants who are gurus in Cash Flow Forecasting cannot only add value to their client base but also gain an edge over their competitors in the process.
This article is aimed at educating accountants on how Cash Flow Forecasting can help your client’s needs.
This article is aimed at educating accountants on how Cash Flow Forecasting can help your client’s needs.
The Accountant’s Role
The area of Cash Flow is one where many businesses are hugely suffering. In a recent survey taken by Xero, it was discovered that only about 48% of small business in the UK were cash Flow positive at any given time.
Moreover, you do not need stats to tell you that agitation over Cash flow is a variable that is common among most business owners.
The accountant can not only offer Cash Flow Projection services for these set of clients but also provide consultancy and advisory services for them.
Technology has even made this simpler
The key to offering cash flow advisory is AI. Yes, I mean Artificial Intelligence. Fluidly is a program that uses machine learning to do heavy data lifting for the accountant. Using this program, you can quickly provide actionable insights that would help you decide and advise your clients on what to do next.
The portfolio view of Fluidly would not only show you a real-time list of all your clients. It would also give you an overview of financial numbers to help you identify which of your clients have cash flow problems.
With this, Accountants can offer cashflow forecasting in minutes. It requires no modelling at all. The ease of this does not only benefit the accountants but also the clients as they would be getting more value for less money.
What’s More?