{"id":207,"date":"2021-06-05T14:02:05","date_gmt":"2021-06-05T14:02:05","guid":{"rendered":"https:\/\/www.forwardai.com\/blog\/?p=207"},"modified":"2023-01-03T11:17:53","modified_gmt":"2023-01-03T11:17:53","slug":"how-cash-flow-consulting-helps-businesses","status":"publish","type":"post","link":"https:\/\/www.forwardai.com\/knowledge-center\/blog\/how-cash-flow-consulting-helps-businesses\/","title":{"rendered":"How Cash Flow Consulting Helps Businesses"},"content":{"rendered":"\r\n\r\n\r\n

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The\u00a0dictionary<\/strong><\/a>\u00a0definition of information is: \u201cThe communication or reception of knowledge or intelligence.\u201d The information we take in every day helps us make sense of the world. The same is true of your business financial information.\u00a0The challenging is gathering the right data and applying it in the most constructive ways.<\/strong><\/em><\/p>\r\n\r\n\r\n\r\n

While a growing number of small to medium-sized enterprises (SMEs) use accounting software to track financial information, the real value is taking this information and making it more meaningful. One of the most vital tools for making financial data more intuitive is\u00a0cash flow forecasting<\/a><\/strong>\u00a0via tools like the ones provided by ForwardAI.<\/p>\r\n\r\n\r\n\r\n

In conjunction with the right tools to manage cash flow, businesses also need\u00a0cash flow consulting<\/a><\/strong>\u00a0from accountants aiming to add greater value to the services they provide. Every business owner understands they have to comply with many levels of business legislation, like taxes. But, they also want to know how to make better short- and long-term business decisions.<\/p>\r\n\r\n\r\n\r\n

Why cash flow consulting is crucial<\/strong><\/h2>\r\n\r\n\r\n\r\n

Study after study has shown that cash flow issues are one of the main reasons businesses fail.\u00a0According to\u00a0JPMorgan Chase<\/a>, most small businesses only have enough of a buffer to cover 27 days of expenses.<\/strong><\/em><\/p>\r\n\r\n\r\n\r\n

In order for a business to succeed, it has to understand exactly how money is moving in and out of the business. It has to know when customer payments are received and when vendor payments are due. As simple as this may sound, it\u2019s actually easier said than done.<\/p>\r\n\r\n\r\n\r\n

While accounting software is genuinely useful for capturing data, the real opportunity comes the tools for interpreting this data and making it more meaningful for the end user \u2014 the business owner.<\/p>\r\n\r\n\r\n\r\n

Cash flow management starts by creating forecasts. It\u2019s further improved through cash flow consulting provided by a professional accountant with the expertise to explain concepts, like the difference between\u00a0cash flow and profit<\/a><\/strong>, and help set and evaluate goals.<\/p>\r\n\r\n\r\n\r\n

Information overload vs information empowerment<\/strong><\/h2>\r\n\r\n\r\n\r\n

The struggle is real.\u00a0According to IBM<\/a>,\u00a02.5 quintillion bytes of data are produced every day.<\/strong>\u00a0<\/em>A single copy of the\u00a0New York Times<\/a><\/em><\/strong>\u00a0contains more information than the average 17th<\/sup>-century Englishman would have encountered in his entire lifetime.<\/p>\r\n\r\n\r\n\r\n

However, a 2016 study by the\u00a0Pew Research Center<\/a><\/strong>, indicates that people have learned to live with increasing amounts of data and are accepting it as the norm. In fact, 67% (nearly two thirds) of respondents said that having more information at their disposal actually simplifies their lives.<\/p>\r\n\r\n\r\n\r\n

SMEs who review their cash flow only once a year have a meager 36% survival rate after five years. Those who monitor cash flow on a\u00a0monthly basis<\/a>\u00a0have a staggering 80% survival rate.<\/strong><\/em><\/p>\r\n\r\n\r\n\r\n

Truth: When we need to know something, most of us \u201cGoogle\u201d it. But, how do you make analyzing cash flow as easy as an online search?<\/p>\r\n\r\n\r\n\r\n

Cash flow forecasting \u2014 there\u2019s an app for that<\/strong><\/h2>\r\n\r\n\r\n\r\n

One of the largest areas of growth for accounting software, especially cloud-based, online versions, is third-party applications (apps). These apps work with the accounting software to add greater functionality in terms of gathering and analyzing data.<\/p>\r\n\r\n\r\n\r\n

ForwardAI\u2019s cash flow forecasting tool helps SMEs and the accountants who serve them turn financial data into a highly visual, intuitive and near-real-time report.<\/p>\r\n\r\n\r\n\r\n

Currently integrating with QuickBooks Online (with future integrations to come), ForwardAI\u2019s cash flow forecast uses data visualization to take raw financial information and translate it into an interactive dashboard that breaks down a business\u2019 cash flow and risk profile.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n

Why spreadsheets don\u2019t work<\/strong><\/h2>\r\n\r\n\r\n\r\n

Humans are\u00a0visual learners<\/a><\/strong>\u00a0\u2014\u00a090% of the information transmitted to our brains is visual.<\/strong>\u00a0<\/em>In terms of visual impact, most spreadsheets just don\u2019t cut it.<\/p>\r\n\r\n\r\n\r\n

According to big data expert Bernard Marr, the\u00a0problems with spreadsheets<\/a><\/strong>\u00a0are that:<\/p>\r\n\r\n\r\n\r\n