Blog

Keep it Rolling: How to Do Cash Flow Forecasting in Business Central

By Chris Young
Cash Flow Forcasting_Header_01

You’ve probably heard the quote that most business failures are due to a lack of cash flow, not a lack of sales. On a deeper level, it’s usually because of a lack of awareness of the cash flow picture as a whole—everything that is coming in and everything that is going out—not just what has been invoiced. Cash flow forecasting and reports can give you that overall big picture, so you can make business decisions quickly and prevent surprises at the end of the month. 

Cash flow forecasting accounts for every dollar that you expect to come in or go out of your company, including overhead costs like office space, purchasing, payroll, etc. Cash flow forecasting reports can be done on a monthly, weekly, or even daily basis. In the past, it’s been done manually, which was a ton of work for accounting departments.  

Cash flow forecasting reports can help you: 

  • More accurately predict and manage your cash flow 
  • Give you early warning about potential cash flow discrepancies 
  • Identify and problem-solve cash shortages before they happen 
  • Identify and plan what to do with surpluses 
  • Consider “what if” scenarios and develop mitigation strategies  

Luckily, you don’t have to hire an extra accountant just to do cash flow forecasting—Microsoft Dynamics 365 Business Central can do it for you! 

In a recent Coffee with Chris Webinar, our resident Business Central expert went over all the ins and outs of how to set up cash flow forecasting in Business Central.

Get Started with Cash Flow Forecasting Reports in Business Central

Cash flow forecasting is a feature that’s built right into Business Central, so there’s no need to download anything new—all it takes is a few clicks to set up. If you have everything else set up in Business Central, it’ll pull in your starting balance, you’ll add all your GL accounts, and you can also add manual costs that aren’t always set up for AR/AP. Things like investment dividends, expected income and sales, grants, assets, etc. It can be programmed to update on whatever frequency you prefer, daily, weekly, monthly, or longer. At the end of the month, you can easily compare your forecast to the actual numbers from the month and plan more precisely for the future.  

You can also adjust individual entries in the forecast manually. If you know there’s a problem or delay with an invoice, you can account for that. You can also account for payments that you know come in late. Even if they say net 30, but they never pay until net 60, your forecast can take that into consideration.  

One of the most useful features of cash flow forecasting in Dynamics 365 Business Central is that it automatically gives you a visual representation of your forecast, so you can drill down into each category and see how it stacks up against your overall forecast and your actual spending.

Watch the Video to Learn More About Cash Flow Forecasting 

In the episode of Coffee with Chris below, he explains how to set up your cash flow forecast in Business Central and gives some tips and tricks to help you get the most out of the system. Setting up a cash flow forecast could be the difference between the long-term success of your business and premature failure.  

Business Central can also connect with a machine learning API, your preferred tool or Microsoft Azure, to give you even more insights into your forecast. The machine learning component will analyze your last two years of data, compare it against your current data, and give you extra insights and predictions that will help you make even stronger business decisions.  

Watch the webinar below and get your business on track for resilience and growth with automatic cash flow forecasting.

If you’re curious about cash flow forecasting, or any of the other features of Microsoft Dynamics 365 Business Central, schedule a discovery call. The Clients First team can help you figure out what software solutions could help your business be more efficient and grow sustainably.

Chris Young

Chris Young

Partner, Clients First Business Solutions New Jersey

Chris Young is your go-to resource for all things Dynamics NAV and Dynamics 365 Business Central at Clients First. Highly skilled in ERP solution architecture and financial planning, Chris has spent the last 30 years helping clients select and implement the right financial, manufacturing, and distribution software for their needs. When he’s not presenting to captivated crowds or sharing his knowledge through product demos, you can find Chris in the garage working on a car or fixing something around the house.