Cash flow forecasting in a recession


As interest rates continue to rise and the stock market continues to decline, fears of an impending recession are valid across many markets. Small business clients especially become vulnerable from the cash flow crunch that can sneak up on them during these economic situations.

Below are three cash flow automation tools that can be used to help clients create forecasting models. While cash flow forecasting may not be the main service provided by tax professionals, it can be a critical and sought after service when clients view us as key financial advisors and consultants.

1. Dryrun

Dryrun integrates with key accounting tools like QuickBooks and Sage. In addition to cash flow forecasting the software also boasts other tools like live currency conversion and consolidation tools making it a contender for businesses that may have foreign transactions or subsidiaries.

Cash flow forecasting integrates A/R and A/P tracking to forecast real time cash flow projections as well as building in actual due dates for invoices to highlight key metrics on an easy to use dashboard. Pricing starts around $300/month making it manageable for a small firm to gain their investment back with only a few cash flow projects for clients.

2. CashAnalytics

CashAnalytics offers similar features to Dryrun, but also includes bank connectivity. This heavy hitter is a bigger fit for firms with larger clients. The software can also do multi-location forecasting as well as working capital analysis. The price point is over $1000/month for a team of three.

3. Cube

Cube is described as next generation and appears on both MarketWatch and MacroTrends as a best choice for cash flow forecasting software. This again is better suited for larger companies as the price point starts around $2,500/month.

The software integrates with everything from Quickbooks and Xero to Netsuite and Sage. It can handle multi currency and consolidations as well as create budgets. Cube also boasts best in class reviews for its financial planning and analysis capabilities.

Regardless of software choice, as cash flow becomes more critical in the current economic climate, now is a good time to bring it up to clients. Especially as you are preparing 2022 income tax returns, we as practitioners have the unique insight and perspective to help clients plan for the future. 

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