Float forecasts the cash in your bank accounts and nothing else. It does not produce a profit and loss forecast or a balance sheet forecast, and it does not support three-way forecasting. That is a design decision rather than a gap in the roadmap. Cash and profit answer different questions, and a forecast built to answer one of them is more reliable for not trying to answer both.

What Float is built to do

Float's own support centre puts it in one sentence: Float is built to deliver a highly accurate short to mid-term cash flow forecast and does not support 3-way forecasting. The same source states the other boundary. You need an active Xero or QuickBooks Online account to use Float, because it is designed to enhance existing accounting software rather than to replace it. Without data from one of those platforms there is no forecast to build. Sage Intacct is on a waitlist.

Everything Float does starts from that data. The forecast opens on the reconciled balance in Xero or QuickBooks Online, not the bank feed, and works forward through the invoices you are owed, the bills you owe, and the budgets you have set for money that is not yet in the ledger. It imports once a day at an hour you choose, with a manual sync when you need one, and nothing flows back the other way. Two views sit on the same data: a weekly view covering the next 13 weeks, and a monthly view extending up to three years. Scenarios stack on top of the base forecast and change budgets only, so the base stays intact as the record.

ICAEW describes a cash flow forecast as an estimate of the timing and amounts of cash coming in and out over a specific period. That is the whole of what Float models: a cash forecasting tool in the category that finance bodies call short-term and medium-term cash forecasting, and it is not a member of the two categories it is most often confused with. Float is not accounting software: it does not record transactions, manage a chart of accounts or replace the general ledger. Nor is it a financial planning and analysis platform. The Association for Financial Professionals defines FP&A as the integrated planning, budgeting, forecasting, performance management and analysis function of the finance office, which is a wider job than forecasting cash, and one that typically produces a full set of projected financial statements. Float produces one of those statements, in forecast form, and leaves the other two where they already live.

What Float does not model

The list is short and it is deliberate.

There is no profit and loss forecast. There is no balance sheet forecast. There is no integrated three-statement model, which is what three-way forecasting means: a profit and loss, a balance sheet and a cash flow that reconcile to each other. Float does not attempt the reconciliation because it does not attempt the first two statements.

There is no long-range financial model. The monthly view runs up to three years, which covers budgeting and board conversations, but Float is not the right tool for a business whose primary need is a three-to-five-year projection.

There is no bank connection. Float reads reconciled data from your accounting platform, which is why it is not the place to investigate a payment that landed this morning and is exactly the place to see what the ledger says will land over the next quarter.

There is no payment execution and no automated collections. Float shows what you are owed and what you owe, and when each is expected to move. Acting on that is still a person's job.

Three things Float does have are sometimes mistaken for profit and loss features, so it is worth being precise. Float has budgets, in four types, but they are cash budgets: an expected payment or receipt on a date, not an accrued cost in a period. Float has a budget-against-actual view, but the actuals in question are Float's actuals, meaning everything synced from the accounting platform including unpaid invoices and bills, which is broader than the accounting sense of the word. And for Xero users on the accruals basis, Float's VAT prediction shifts cash budgets to the date the VAT liability falls due. That is a cash-timing feature that understands accruals rules, not accrual accounting.

Why cash and profit are different questions

The accounting standards explain the difference more plainly than most software does. ACCA's technical guidance states that accruals accounts attribute income and expenditure to the accounting period to which they relate and not to the timing of cash settlement. IAS 7, the standard behind the statement of cash flows, exists because users need to examine the relationship between profitability and net cash flow, which means the two are recognised as different things whose relationship needs examining.

The difference is not an abstraction. It sits in specific transactions that leave your bank account without ever touching the profit and loss, and in others that touch the profit and loss without moving cash.

Capital expenditure leaves in full on the day you buy the asset; the profit and loss sees it only as depreciation, spread over the years that follow. IAS 7 classes the purchase as an investing cash flow, not an operating cost. Loan repayments are split by the same standard: the interest is an expense, the principal is a financing cash flow that the profit and loss never records. Dividends are a financing cash flow too, and under the Companies Act 2006 a company may only pay them out of profits available for the purpose. That rule is a legal ceiling on the payment. It says nothing about whether the cash exists on the day the board wants to pay.

Tax runs the other way. VAT collected on your invoices is not your income and never enters trade profit, but it leaves your bank in one movement, due one calendar month and seven days after the end of the VAT period, whether or not your customers have paid you. Corporation tax does appear in the profit and loss, but the cash goes out nine months and one day after the year end for companies below the instalments threshold, so a profitable year can be paid for in a quarter that is not.

Depreciation completes the picture from the other side. It reduces profit every month and never leaves the bank at all. A profit and loss forecast has to carry it; a cash forecast has no line for it.

Put those together and the shape of the problem is clear. A profit and loss forecast is built to ignore exactly the timing gaps that decide whether the bank balance holds. That is not a weakness of the profit and loss; accrual accounting is meant to work that way. But it is why the profit and loss is the wrong starting point for the question "will we have the cash?"

Why one forecast should model one and not the other

There are two ways to arrive at a cash figure, and the standards name both. Under the direct method, the major classes of gross cash receipts and gross cash payments are set out as themselves. Under the indirect method, profit or loss is adjusted for non-cash items, deferrals and accruals until it reconciles to cash. IAS 7 permits either and encourages the direct method. FRS 102, the UK standard, permits either and expresses no preference.

For forecasting, the profession is clearer about which suits which horizon. The Association for Financial Professionals states that short-term forecasts use a direct method to track cash inflows and outflows, while longer-term forecasts look beyond a year and rely on a top-down approach that projects cash movements from forecast income and balance sheet changes. ICAEW's guidance for finance professionals says to use the direct method where possible, showing cash inflows and outflows, and describes the indirect method, which reconciles cash to the profit and loss, as less easily understood but a useful control.

No professional body goes as far as to say that a short-term cash forecast must never be derived from the profit and loss. The argument for building it the other way is a practical one. A model that starts from the profit and loss has to reintroduce every timing gap the profit and loss was designed to strip out: the receivable that will pay late, the VAT that falls due before the customer pays, the loan principal that is not an expense, the capital purchase that is. Each of those is an adjustment, each adjustment is an assumption, and each assumption is somewhere for the forecast to be wrong. A model that starts from the bank balance and the ledger's open items never has to put those gaps back, because it never took them out.

The cost of that choice is horizon. A direct forecast is strongest where the inputs are contracted: invoices raised, bills received, payroll scheduled, tax dates fixed. As the horizon lengthens, contracted items give way to budgets, and the forecast's accuracy depends on the quality of those budgets rather than on the ledger. That is why Float's weekly view covers 13 weeks and why its monthly view is built on budgets that Float keeps current from your own history. And it is why Float stops where the direct method stops. A tool that took the same data and tried to produce a profit forecast and a balance sheet as well would need a second set of assumptions about recognition, accruals and asset values that a cash forecast has no use for, and would spend its accuracy on a question the ledger already answers.

Where the profit and loss still belongs

In your accounting platform, where it already is. Xero and QuickBooks Online hold the profit and loss and the balance sheet, on an accrual basis, with the audit trail a lender or an auditor will ask for. Float does not duplicate them and does not need to. The finance team's stack becomes two instruments with two jobs: the ledger answers whether the business is making money and what it owns and owes; the forecast answers whether it will have cash on the dates that matter.

Company law makes the same division. A UK company is deemed unable to pay its debts, under section 123 of the Insolvency Act 1986, if it cannot pay them as they fall due. That is a cash test, and the one that ends companies. The Insolvency Service puts it directly: not having sufficient cash is one of the most significant factors in companies failing, even when they are trading effectively. No published study with a disclosed sample and method puts a percentage on how many failed companies were profitable at the time, and the figures that circulate have no such study behind them. The statement from the body that winds companies up is enough.

The law also asks less of a company at this size than the objection assumes. From 6 April 2025 the small company turnover threshold under the Companies Act 2006 rose to £15 million, so most businesses between £2.5 million and £10 million qualify as small, and a small entity is not required to prepare a statement of cash flows at all under FRS 102. The forecast is not a statutory document for a company in this band. It is a management instrument a finance team chooses because the ledger cannot answer the cash question for it.

Which question the buying committee is asking

The objection to a cash-only tool usually arrives as "we need a broader finance platform". The questions inside that sentence are worth separating, because each already has a home.

If the questions in the first three rows are the ones going unanswered, the gap is in the accounting stack or the close process, and a cash forecasting tool will not fill it. If the last three are the ones going unanswered, a broader platform will answer them less precisely than a dedicated one, because it will derive cash from a profit model rather than from the ledger's open items. We cover that trade-off in the comparison of built-in cash flow planners and dedicated forecasting tools.

How Float fits

Float is the cash instrument in that two-instrument stack, built for finance teams on Xero or QuickBooks Online.

The forecast opens on the reconciled balance in your accounting platform and works forward through open invoices at their expected payment dates, open bills, and your budgets. Data imports automatically once a day at an hour you set, with a manual sync on demand. In the current month Float takes the higher of budget or actual in each cell, so a budget is a placeholder that the real invoice, bill or transaction fills. Four budget types cover repeating, one-off, auto and linked lines; auto budgets track your own history and update themselves at each month end.

The weekly view is a rolling 13-week cash forecast; the monthly view runs up to three years. Scenarios sit on top of the base forecast, change budgets only, and can be toggled to compare positions before a decision is made. Consolidation combines companies into one group cash position with a display currency. Exports to PDF and CSV are started by a user when they are needed; nothing is scheduled or distributed automatically. Access is by role, with Admin, Editor and Viewer levels, and two-factor authentication is mandatory for accounts connected to Xero.

For the profit and loss and the balance sheet, Float points you back to your accounting platform, which is where those questions belong. If you are working out whether a dedicated tool earns its place beside the ledger, our guides on the difference between cash flow forecasting and accounting reports and why profitable businesses run out of cash cover the two ends of that argument.

Frequently asked questions

Does Float do three-way forecasting?

No. Float does not support three-way forecasting, the integrated profit and loss, balance sheet and cash flow model. It is built to deliver a short to mid-term cash flow forecast from the reconciled data in Xero or QuickBooks Online, and it leaves the other two statements to the accounting platform.

Can Float produce a profit and loss or balance sheet forecast?

No. Float forecasts cash only. It has no profit and loss forecast and no balance sheet forecast, and it does not record transactions, manage a chart of accounts or replace the general ledger. Those statements stay in Xero or QuickBooks Online, on an accrual basis, with their audit trail intact.

Does Float replace Xero or QuickBooks Online?

No. Float requires an active Xero or QuickBooks Online account and builds its forecast from that platform's data through a one-way sync. Nothing is written back. The accounting platform remains the system of record for profit, position and reporting; Float adds the forward cash view that the platform does not produce natively.

Does Float model depreciation and accruals?

Depreciation has no line in a cash forecast because it never leaves the bank; Float models the asset purchase as the cash outflow it is. Float does not produce accrual accounts. The one place it applies accruals rules is VAT prediction for Xero users on the accruals basis, where it shifts cash budgets to the date the VAT liability falls due.

Does Float track budget versus actual?

Yes, for cash. Float's budgets are expected receipts and payments on dates, and its budget variance insight compares them with what actually synced from the accounting platform. Float's definition of actuals includes unpaid invoices and bills as well as bank transactions, so it is wider than the accounting term, and it is not a comparison of accrued cost against a period budget.

What is the difference between the direct and indirect method?

Under the direct method, a cash flow is built from the gross cash receipts and payments themselves. Under the indirect method, profit is adjusted for non-cash items, deferrals and accruals until it reconciles to cash. IAS 7 permits both and encourages the direct method; FRS 102 permits both without a preference. Float's forecast is direct: it starts from the reconciled balance and the ledger's open items rather than from a profit figure.

Is a cash-only tool enough for a finance team of three?

For the cash question, yes, and a team of three is usually better served by an instrument that does one job well than by a platform that derives cash from a profit model. If the team's unanswered questions are about profitability, month-end close or statutory reporting, the gap is in the accounting stack and a cash forecasting tool will not close it. We would rather say that plainly than sell a forecast into the wrong problem.

Who can see our financial data in Float?

Access is controlled by role: Admin, Editor and Viewer, where a Viewer can read and comment but not edit. Two-factor authentication is mandatory for accounts connected to Xero and recommended for all. Float reads from your accounting platform and does not connect to your bank, so no banking credentials are involved, and support access to your account is opt-in and can be revoked by you.

Float connects to Xero or QuickBooks Online and gives finance teams a rolling 13-week cash forecast built from reconciled accounting data, synced daily. Start a 14-day free trial with no credit card, or see pricing.