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Here’s Your Guide To Predict Cash Flow Using QuickBooks!

There are indeed many ways to predict your company’s future financial position. However, cash flow forecasting is one of the significant methods through which a company can get an insight into upcoming cash requirements across their company. Your company’s profit forecast is the driving force behind your business’ growth and success. Moreover, considering cash flow forecasting in a company can help to plan investments and take advantage of promising opportunities.

The cash flow forecast of a company shows the estimate of incoming revenues for a certain period and assists with managing wherewithal. While it is obvious that the bigger the company, the more complex and complicated will be the cash flow forecasting, but at the same time, you have a short-time forecast and a long-term vision that may help you to create larger plans for the near future opportunities of your company. Typically your cash flow forecast consists of here mentioned components: Opening Balance, Receipts, Net Receipts, Payments, Net Payments, Net Movement assessed by individual cash flow item, Closing Balance.   

Process To Follow In QuickBooks:

QuickBooks is efficient accounting software that helps you to calculate the expected capital of your company. QuickBooks extends you the benefit of putting your reports together. Here’s the process you need to follow to forecast the cash flow of your company in QuickBooks :

  1. Launch the QuickBooks application.
  2. Go to “Reports.”
  3. Select the option “Company & Financial.”
  4. Further, choose “Cash Flow Forecast.”
  5. Take an eyeshot of the QuickBooks Report that puts together your receivables, payables, and bank accounts. Further, you can calibrate this report based on specified periods. Remunerate for customers that you already know are going to miss their due dates, and shift the date range. Moreover, if the report doesn’t seem realistic, review the information that you have in your QuickBooks account if you have missed any purchase orders, invoices, or any other specific detail.
  6. Analyze and compare your projection to previous cash flows with the help of a Statement of Cash Flows. Go to the Reports menu and click “All Reports” > Choose “Business Overview” > Select the option “Statement of Cash Flows”.
  7. The “Statement of Cash Flows” report allows you to perusal the cash flow that had been done over the period. The attested information will help you to understand how your forecasts fall into a certain range. Analyze the factors that affect your profits and losses, and how you can fine-tune your business activities.

Explore The Cash Flow Projector In QuickBooks

QuickBooks also provides the facilitating feature of a Cash Flow Projector that is specially optimized for short-term forecasts. Moreover, it gives you an insight into the next six weeks of your company’s financial performance. Here’s how you can explore this feature on QuickBooks:

  1. Go to “Company” > “Planning & Budgeting.”
  2. Select the “Cash Flow Projector” option from the drop-down menu.
  3. Further, choose the bank accounts you want to use for your projections.
  4. Projecting Cash Receipts – There are many ways to project your cash receipts for the next six weeks. Using the Cash Projector, you can: Project cash receipts manually. Use an average of the last 6 weeks, use a weighted average of the last 6 weeks, use the same 6 week period last year, use the average of the same 6 week period last year.
  5. Estimating Business Expenses: You can choose upcoming business expenses such as salaries along with the frequency of the payments.
  6. Projecting Accounts Payable: This screen will show all the open accounts payable figures that exist in your QuickBooks and accompanying due dates.

Hence, QuickBooks helps you to keep your business on track efficiently!