Cash flow budgeting using float app

Table of Contents

A Cash Flow statement is one of the important financial statement that lists the movement of cash inflows and outflows of the business during the specific predetermined period. A cash flow statement is not just about the cash inflows and cash outflows but also about the timing of these in and outflow. It includes the cash inflow and outflow of the business under three heads,

Investing Activities
Operational Activities
Financing Activities

A cash flow budget is prepared as an estimation of future deposits and withdrawal to the checking account. The main objective behind the preparation of the Cash Flow Budget is to monitor the accuracy of the estimation. These budgets help to make the monthly estimation for the coming year and also enter the actual inflows and outflows as you progress through the year. This allows you to compare the actual figures with estimation to make adjustments to the estimation for the remaining year.

What do we mean by Cash Flow analysis?

It is a technique that uses the cash flow statement to determine the value of overall companies and also the individual companies’ part of a large company by looking at the excess cash produced by companies.

What are the requirements of Cash Flow analysis?

Following are the requirements of Cash Flow analysis:

Balance Sheet
Profit and loss Account/Income and Expenditure Statement
Statement of Change in Equity
Explanatory Notes

How Xero accounting software and Float App used for cash flow Budgeting?

Xero is the most used online accounting software for operational cash flow forecasting tool. The float app seamlessly integrates with Xero to keep the Forecasting of the cash Flow updated with a live and rolling picture of the cash flows.

How does it work?

You just have to connect the Float app to Xero accounting software, set your budgets. The Float automatically imports the data from Xero Data every 24 hours. It reads the expected payment dates on your invoices and bills and using those dated to project when cash will move in and out of the business. The cash flow is updated with actual figures. Once the cash outflows, you can reconcile it with Xero data every 24 hours.

What are the Pros and Cons of the Float App?

Let first see the Pros:
It provides the visual presentation of the cash flows.
It helps to update the estimated values with actual ones.
It has a User-Friendly Interface.
It is economical

Cons:
Lack of a proper search bar and dashboard
Sometimes loading the data takes some time.
How Float app shows the cash flow projections info graphically?

It gives you a visual picture of your cash flow to pot your cash shortages and surplus well before it happens. thus leaves you with ample time to secure funding and reinvest the surplus cash.

Why Cash Flow Budgeting and Planning are important?

Planning for Cash flow helps on focusing long-term finances while a Cash Flow Budgeting helps in the formulation of a plan for future savings and retirement.

Cash Flow Budgeting helps you to get prepared for what lies ahead while cash Flow ensures Financial Stability and longevity.

In short, we can say Cash Flow Budgeting and Planning go hand in hand. It helps a business to plan out how your cash flow is matched with your spending in direct correlation with an effective budget.

So, Float App would work-out your Cash Flow budgeting with adequate planning.