Cash Flow is what makes businesses live
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.
This article is aimed at educating accountants on how Cash Flow Forecasting can help your client’s needs.
Firstly, it is essential to note that technology has transformed the role of the accountant. Accountants who limit themselves to traditional compliance are shortchanging themselves.
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.
Accountants can take advantage of the existing technology around. Before the current technological advancements, creating a cash flow forecast was boring, monotonous and time-consuming. And even after completion, the data accumulated could become outdated almost immediately.
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.
Yeah, Credit Control. Having an excellent credit control system is essential to solving cash flow problems when they pop up. Fluidly helps with this by sending email reminders about new expenses that may rise and recommending apps that would speed up the payment process.
