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Why We Are Into Cash Flow Forecasting

There are a lot of clichés in business. “Cash is King!” – we hear this all the time. ”There is a a big difference between Profit and Cash” – another statement that business commentators love to bestow on to new business owners.

Lots has been written on the subject of profit vs cash, so I won’t delve into it here, the classic scenario being a business that is in profit on the books, but due to a late payment they could be severely in debt to the bank, and in the worst case forced to close, even though they are technically in profit.

The other common scenario is that a business has a decent amount of cash in the bank, but doesn’t realise they have to pay a significant amount of tax, or a large bill or credit card payment that quickly drains that cash. The cash in the bank didn’t accurately represent the state of the business.

forecasting can be stressful

The trouble is for most business owners that while they know all of this, actually keeping on top of both of these metrics is the difficult part. Looking at a P&L account doesn’t always make sense, it’s not clear where the numbers have come from and what is and isn’t included. Running an excel spreadsheet to manage all of this isn’t a simple task either.

Thankfully accounting is going through a radical shift at the moment with the amazing work that the likes of FreeAgent and Xero are doing for small businesses in that space. It’s so much easier to understand a balance sheet and a P&L now that we have those tools, and they are live and dynamic.


For us at Float we’re passionate about building something that helps small business owners understand cash flow, and what it means to look ahead and know what your bank balance will look like at the end of the month, or in 6 months time.

Cash flow forecasting is a moving target. It changes almost every day, and keeping up to date with or without a spreadsheet is a huge headache (I did it that way for years), and ultimately it gets neglected and becomes a significant amount of work to bring it back up to date.

We’re building something that helps small businesses finally get a grip on cash flow forecasting, in a way that doesn’t require any training or financial qualifications. We wanted to build something that was quick to set up and easy to come back to after a couple of weeks without being defunct. Something you could understand at a glance, and could refer to on a day to day basis.

Why hasn’t anyone done this before?

With the arrival of cloud based accounting, finally we can get hold of the data that will make good forecasting possible. And we hope that with the feedback we get from Float users, we’re effectively getting a multitude all working on the problem together.

Of course, every business is different, but the key thing is that by learning from business owners we can find better solutions than the traditional accounting style spreadsheet, which isn’t wrong, but just isn’t working for the majority of people we talk to.

Colin Hewitt

CEO and Founder of Float, cash flow forecasting made easy.