Xero Cash Flow Forecasting Tool - Uses and Limitations The Xero forecasting tool is powerful and will allow you to do a lot, including acting as a short-term cash flow tool. If you want to take control of your business’s finances, it’s important to consider Xero.
In this Xero cash flow forecasting guide, we’re going to cover a few key topics:
- What is a cash flow forecast?
- What is the Xero cash flow tool?
- Creating cash flow forecasts in Xero
- Much more
What Is a Cash Flow Forecast?
A cash flow forecast is a projection of your business’s liquidity for a specific period of time. For example, you may want to run a monthly cash flow forecast, and this forecast will include:
- Inflows into your accounts, such as invoices being paid and products being sold
- Outflows, such as buying inventory, paying rent, utilities and payroll
When you start using Xero cash flow forecasting, you can forecast what your cash flow will be at a specific moment in time. For example, you may learn that in the next 30-day period, your business will have negative cash flow if trends remain the same.
In this case, you may want to secure outside financing to help keep your operations up and running.
What Is Xero Forecasting Tool?
Xero does a lot of great things for accountants and bookkeepers, and it’s a feature-rich platform that allows you to pay bills, connect bank accounts, claim expenses, accept payments, track projects, reconcile bank accounts and more.
However, many users overlook the Xero forecasting tool.
Why?
Many users ask the question “how do you use cash flow forecasting in Xero?” because they don’t know that the tool exists.
However, since the platform does track revenue and expenses, it does have the power to help you with cash flow forecasting.
How Do I Create a Cash Flow Forecast in Xero?
Xero makes it easy for users to run their first forecast. You will need to do the following:
- Connect your bank account and other platforms to track inflows and outflows
- Build a cash flow forecast using either the business snapshot features or the short-term cash flow tool
You'll find the forecast option under the dashboard section and will have the option to choose projections for 7 or 30 days. Higher-tier accounts have cash flow forecasts for up to 90 days.
Finding the short-term forecast tool is easy:
- Click on the Business menu
- Choose Short-term cash flow
- Select the bank accounts to include under Bank accounts included
- Navigate to Projection applies to and select the duration
- Click view projection
Xero Cash Flow Forecasting Methods
Xero uses the information in your bank account and historical data to create:
- Real-time cash flow report
- 7-day forecast
- 30-day forecast
However, Xero cash flow forecasting methods are limited. The platform only uses short-term forecasting methods and doesn’t have an option for long-term forecasting.
Should I Use the Xero Cash Flow Forecasting Tool for My Business?
The Xero forecasting tool is limited, and it’s a good option for a short-term forecast. However, it has a few issues that you should know about:
Limitations Of Cash Flow Forecasting in Xero
- Only allows for short-term cash flow forecasts
- Lacks advanced forecasting options
- No scenario forecasting options
Xero is a fantastic solution to manage your business’s finances, but it’s not a dedicated cash flow forecasting tool. A dedicated tool will always provide you with more cash flow-related features than a tool like Xero that does a little of everything.
Why Is Xero and Cash Flow Frog the Best Integration for You?
Xero is a powerhouse in the industry and is filled with state-of-the-art accounting features. You can use the platform anywhere in the world where you have an Internet connection, and it can help you:
- Take control of your finances
- Understand expenses
- Save on costs
- Save time
- So much more
However, the true power of the platform comes from the 800+ integrations with apps and plugins that are available. These integrations allow you to connect to Cash Flow Frog for one of the industry’s best integrations.
Why?
When you combine these two platforms together, you gain accurate data from Xero with the advanced cash flow features of Cash Flow Frog. If you want to make better decisions to grow your business and have a complete understanding of your liquidity, there’s no better pairing in the industry than Cash Flow Frog and Xero.
Cash Flow Frog Makes Xero Forecasting Easy
Cash Flow Frog’s Xero integration makes running forecasts as simple and easy as possible. Once you allow us to access the data in your Xero account, we can begin:
- Processing the data
- Empowering the data to focus on cash flow
- Begin using Cash Flow Frog + Xero in minutes
Our platform is one of the leading cash flow centric platforms in the world. When you combine the power of our tool with Xero, it opens a world of financial data to you that can help you make smarter business decisions.
Advantages Of Cash Flow Forecasting in Cash Flow Frog Software
Cash Flow Frog extends the great features of Xero by allowing you to take full control of your cash flow. While Xero allows for a short-term cash flow forecast, Cash Flow Frog empowers you with:
- Long-term forecasts for over a year in the future
- Real-time cash flow statements and reports
- Customer insights
- Custom dashboards and branded reports
- Multiple perspective options
- Scenario planning
Cash Flow Frog can collect the data from your Xero account and allow you to visualize the financial health of your business in a way that makes sense to you.
Get Better Cash Flow Forecasts for Your Business with Cash Flow Frog
If you want to leverage a cash flow tool that doubles as a Xero forecasting tool thanks to built-in integration, Cash Flow Frog is the best choice for you. Our platform offers state-of-the-art cash flow features, such as:
- Daily, weekly, monthly, quarterly, annual and more cash flow statements
- Cash flow forecasts and projections
- Scenario planning
- VAT/GST forecasts
- Customer analysis
- So much more
If you want to extend the Xero cash flow forecasting process, Cash Flow Frog is your best option. We invite you to give our platform a try for yourself to see just how powerful Xero and Cash Flow Frog can be together.
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