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Cash flow planning using cloud accounting

The COVID-19 outbreak is already having a significant financial impact on a number of sectors such as hospitality and leisure and this is set to expand further into other businesses, both in terms of supply chains and consumer demand.

Cash flow planning is therefore critical, and we recommend that all businesses consider the potential financial impact COVID-19 may have on their business and assess the resources they need to weather the storm

For those of our clients who currently use Xero or Quickbooks Online we recommend that you consider the use of a cash flow forecasting add-on to start to assess “what-if” scenarios such as:

  • What if my supply chain is disrupted and I’m unable to supply some goods or services?
  • What if I experience a reduction in sales due to less demand arising from COVID-19?
  • What if my business is forced to temporarily close through government policy but I need to keep paying staff and other overheads?

It is best to have a worst case “what if” scenario in mind so that you can plan appropriately, looking at where the key pain points will be and what financial support can be put into place to try to reduce your risk. This may include contacting your bank, utilities providers and HMRC to request payments are deferred or seeking additional finance.

Two of the best cloud-based products which can assist with cash flow forecasting are Float and Fluidly. Both of these products link directly to Xero and Quickbooks Online to provide real-time data to enable accurate forecasting. Float is widely considered the best app to forecast cash flow levels day by day, although it is also able to provide a cash flow forecast on a monthly basis covering a longer period. Fluidly uses advanced Artificial Intelligence to predict future cash flow based on actual historic payment days for customers and suppliers to provide a starting point for a monthly forecast which can then be amended for different scenarios. For more information, please click on the links below:

For those of our clients who don’t use Xero or Quickbooks Online as their main accounting software, please contact your local office if you require assistance with cash flow forecasting or additional finance to sustain your business through the downturn. Our team of advisors is here to support your business through this period of uncertainty.