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What Are Cash Flow Forecasting Tools?

Are you running a business? If so, you know that there’s one thing that’s scary: running out of money. Cash allows you to make smart business decisions, but when you’re low on cash, you cannot make these decisions easily.

One method to help you better manage your cash is to use a cash flow forecasting tool.

These tools will empower you to use the cash flow forecasting model to help you:

  • Identify potential issues with cash flow
  • Make smarter purchasing decisions
  • More

What Is Cash Flow Forecasting?

Why is cash flow forecasting important? It’s the ability to:

  • Forecast upcoming income
  • Forecast upcoming expenses

Forecasts take your current cash flow, which is the sum of your income minus expenses, and then will use historical data to generate a forecast. For example, you may have a decade of data showing your general cash flow growth.

Adjusting certain parameters and using an abundance of data, it’s possible to run cash flow forecasts.

These are forecasts of how much cash you may have at the end of a certain period. Many businesses will run weekly forecasts, so they can make important decisions based on this figure.

For example, it’s possible that:

  • Your cash flow will be low, so you’ll need to secure financing
  • Your cash is high, so you can choose to hire new employees or expand operations

You can create these forecasts by hand, but it’s always best to use cash flow forecasting software.


Software will:

  • Reduce errors
  • Lower costs
  • Allow you to run forecasts at will
  • Also update the data automatically and save time.

What Is a Cash Flow Forecasting Tool?

Cash flow forecasts are an integral part of business, and you should be using tools to help you understand the cash position of your business. There are many issues with running cash flow forecasts by hand:

  • Manual processes take a lot of time, and paying an accountant to run forecasts often is expensive
  • Errors are common because it takes missing just one expense or purchase to make an error

Utilizing the best cash flow forecasting tool opens up a world of cash flow forecasting freedom to your business. You can run forecasts faster and more efficiently using tools.

The Advantages of Using a Cash Forecasting Tool

Tools have a lot of advantages over calculating future cash flow by hand. Some of the many benefits of using software to run cash flow forecasts, include:

  • Real-time information. The right software will integrate into your existing accounting platforms to gather all of your information from a central location. This means that all of your information is up-to-date and can be accessed in real-time.
  • Centralization. If using a cloud platform, you can easily keep all of your information in a centralized location. The ability for offices across countries and landscapes to run cash flow reports or view them is game-changing for business owners.
  • Reports and graphics. Software will help you create graphically enhanced reports to provide them to stakeholders in the business.

Of course, each solution will offer its own set of features and systems to help you manage different areas of your business.

However, there are multiple different tools that you can choose from to help make forecasting fast and easy.

The Different Types Of Cash Forecasting Tools

Small and large businesses have a wide range of forecasting tools that they can rely on to know their cash flow at any given time. Multiple tools exist, and you’ll need to decide on the best solution for your business.

The following are forecasting tool options that you may want to consider:

  • Free: The drawback of free tools is that you need to import and validate the data every time and it quickly get outdated while the paid apps does it automatically in real time
  • Paid: Opting for paid tools means that these solutions can provide more robust reporting and may offer a wide range of features.

You’ll find many paid options that try to help you manage all areas of your accounting. Cloud-based options that focus strictly on cash flow often offer the most robust cash flow forecasting with the power to monitor all areas of your cash flow

Cash flow forecasting tools make sense for businesses. Your business already runs on numerous software applications. However, one of the most important tools in your arsenal will be one that handles all of your cash flow for you.

This post contains affiliate links. Affiliate disclosure: As an Amazon Associate, we may earn commissions from qualifying purchases from and other Amazon websites.

Written by Maguire Haigh

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