Date posted: 2020-06-08
We have been using Futrli, a super-powerful online tool that helps you to generate a cashflow forecast for your business. We’ve been using it with clients and in our own business. So far, we think it’s great. And we wanted to share with you some of the things that this little piece of software can do.
First things first,
Why is a cashflow forecast so important?
Generating forecasts based on your cashflow, profit and loss accounts and balance sheet can be really useful. It can help you to set achievable targets for the coming months. And it will allow you to prepare for growth, periods of stability, or challenges that might cause your business to contract.
Looking at how much cash you have in the bank, or last years’ set of management accounts, or even last years’ year-end accounts is not enough. We need to look at what’s changed, and what’s likely to change as your business moves forward.
Forecasting can be very difficult. After all, nobody can predict the future. But we can make sensible predictions about what might happen within your business over the coming months (global pandemics aside).
Until recently, cashflow forecasts were generated in Excel. One tiny mistake can wreak havoc in your spreadsheet and throw out all of your figures. Futrli is a bit more fool-proof. And whats more, we’ll set up your set up the “behind the scenes” of your account for you. We’ll set up personalised dashboards so you can see what’s important to you. We’ll also link Futrli to your Xero account so that you can pull through your real-time financial data at the click of a button.
Let’s have a look at some of the key features that can save you time and help you to make better business decisions:
1. Creating what-if scenarios
What-if scenarios allow us to manipulate your financial data to see what might happen if you made a change. For example:
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- What if my sales increase by 10% over the next 12 months? Fantastic, we can see what impact that has on all of your financials. And see what difference that might make to your bottom line. Looks good? Right, you can set that as a target!
- What if I reduce my margins so that I can sell my product at a more competitive price? Well, here’s the effect it will have on your net profit, but you’ll still be able to pay your staff. And better still, we can look at what happens if you decrease your margins AND increase sales by 10%!
- What would adding a new member of staff cost me? And how would it affect the wider financial context of my business? Add in their salary, and tax liability, as well as any capital expenditure so that you can see if you can really afford it!
These types of forecasts can help you manage cashflow and profitability. They’ll help you to make the right decisions for your organisation. And you can generate reports like these in a matter of minutes.
The dashboards are really easy to use and can be changed to show you what you need to know. It means that when things changed rapidly, as they have over the last few months, you can prepare for how this might affect your business in the long term.
2. Set targets and create accountability
Futrli can help you put together a high-level, five year plan for your business. But we can also use it to create more detailed 12-month targets. You can monitor progress by comparing actual and forecasted figures. The actual data is pulled from Xero in real-time. And you can see all of this in your easy-to-use dashboard.
The dashboards in Futrli can be customised to show certain sets of data. You can create different user accounts for department managers. In the example above you can allow your sales manager to see the forecasts for what might happen if you increase sales by 10%. This information is probably not relevant to your HR manager, so they wouldn’t have it on their dashboard.
Depending on how your business is structured, you might want to set up dashboards for different regions. We work with one client who uses Futrli to set targets for their regional managers. Targets can be set for individual regions and you can look at any variances or anomalies across different areas.
3. Including non-financial data
So what do we mean by “non-financial data”? Not everything is about the cash that we can see in your management accounts.
Another indicator of business success might be the number of customers you have, how many products you manufactured, or the volume of reports generated. We use Futrli to measure the success of our payroll department, for example. We record the number of payslips generated for clients each month. This is a good measurement of the productivity of the department, rather than looking at only the amount of cash generated.
Sometimes these figures can be more relevant to your business than the numbers in your P&L. You might notice that, despite an increase in the cost of raw materials, you’ve actually made more profit in a given month. Why? Because productivity was higher. So including a non-financial marker that shows how many “product x/product y/product z” you manufactured would be really helpful to see.
What we think:
We think Futrli is great; a really powerful tool to grow your business. It’s straightforward to use and can generate detailed cashflow forecasts in minutes. It’s flexible and can be built around what’s important to you.
There’s some additional features that will also save you time and help you keep on top of things. Alerts can be set up to email you when certain things happen. For example, if your bank balance drops below £5,000. Or if your sales figures reach a certain level. Futrli can keep you up-to-date without having to pour over your management accounts with a fine tooth comb.
We also love the reporting feature. You can create professional-looking reports that are ready to take from the printer straight into your board meeting. Not a paper-based company? Take an auto-generated presentation in with you instead. This sort of thing can be helpful when you’re trying to secure external funds.
If you want to learn more about Futrli, have a look at our walk-through webinar. Our company directors Martin Bown and Sara Whitton take you through some of the key features. Alternatively, just drop us an email or give us a call. We’d love to hear from you.
