It’s no secret that cash flow is king. One recent study from the Federal Reserve Bank of New York showed 82% of small business failures were partly due to cash flow problems. With numbers like that, it’s clear that nearly every small business owner, and their advisor, can benefit from a window into cash flow now and in the future.
The problem is, up until now it’s been difficult to get an up-to-date view of cash flow in Xero without visiting several areas of the product and doing some manual calculations via spreadsheet.
This solution may be fine for occasional advanced planning, but what about when you just want to know “can I pay my bills and staff this month and still be OK?”. Cash flow is personal, emotional and can keep you up at night. We’re hoping this new short-term cash flow feature will help you sleep easier.
A better view of future cash flow today
Anna Curzon, Xero’s chief product officer, just announced at Xerocon Brisbane that a short-term cash flow feature pilot is now underway.
It’s designed for small businesses that want to manage their future cash flows better. It’s also for Xero partners who want to start deeper conversations with clients and offer more useful advice.
This feature will visually project the user’s bank balance 30 days into the future, showing the impact of existing bills and invoices that are paid on their due dates.
Users will be able to choose a bank account and switch between a 7-day and 30-day view. They’ll also see the impact of paying a bill today versus next week, and know which invoices they should follow up on again to help with cash flow this month.
We’re in pilot phase right now because we’re only at the beginning of the functionality we’d like to build. Thank you to everyone who has signed up to try the feature and give us feedback before the official launch in early 2020 – we now have enough participants for the pilot. We look forward to learning more, and providing you with a released short term cash flow product soon.
Can we please have an update on when it will be rolled out?
can you have a 60day forecast too (we get paid on average 45 days so 30 is not enough
Please hurry up
I use an excel workbook to do a 4 MONTH rolling cash forecast – its saved the business on numerous occasions by giving the Directors sufficient notice to take remedial action. There are more categories to take into account than just Debtors and Accounts Payable, and some are derived from more than just the Bal Sheet, to be a proper forecast. The Cash Forecasting functionality of Xero would benefit from allowing data fields that can be manually added to or linked to other sources.
Debtors – by due date
Other income (grants, Centrelink Parental Leave, etc)
– Accounts Payable
– Credit Card statement payments
– Payroll – Net Wages, PAYG Tax, Superannuation Gtee
– Income Tax
Your proposed short term dash board will still need elaboration/rework to give the client the real picture of their cashflow, with a decent trajectory to ensure action can be taken to avert crisis.
Loving this feature! Really helpful and I’m sure you guys are all over the comment below but:
I was going to add that we need payroll in it really but the lady above smashed it with that list!
Thanks so much for your comment, Matt – we’re thrilled to hear that you’re loving this feature!!
This is a great step forward and will (hopefully) become a reliable tool going forward. In addition to the relevant points raised above, I’d also add in that I think it’s somewhat naive to assume all debtors will pay on the due date. Xero Small Business Insights already shows that they don’t. Given Xero already knows the average time that an existing customer usually pays in, why not use that data? For new customers, the default position could be that payment will be made within average days late that an invoice is usually paid per XSBI.
GST/VAT/Sales Taxes (where relevant, depending on your country) is already calculated in Xero and the due dates for payments are known. These amounts definitely need to be factored in to any forecast given how ‘lumpy’ these payments can be in a number of businesses. Something similar for Provisional Tax would be good to see as well.
Hi Paul, thanks for your comment – we are definitely on the same page with our future plans. At the moment our focus is on cash predictions, payroll and sales tax as a priority. Showing invoice expected payment dates based on payment history is in our sights but being mindful to make sure the display is potentially optional and not confusing.
When will it support payroll in short-term cash flow ?
Hi Nigel, thank you for your question. Payroll is absolutely one of the areas we are investing in to improve the predictions we provide. Whilst this is not included today, we anticipate being able to provide an update on how this can be supported in the coming months.