Xero Cash Flow Forecasts: Supercharge your Business with the Cloud

Posted 26 January by Barb Easter in Accounting, Cash Flow, Entrepreneur, Small Business

Of course you can use Xero to generate a cash flow forecast of sorts – after all, Xero’s core functions are a solid option for many accountants. Where there is room for improvement is the cash flow generation process. It’s complex, and dicey results pulled from historical data that may not reflect an accurate future.

Xero Cash Flow Forecasts Built in Spreadsheets

Xero commits you to using the tried and true Microsoft Excel export for the first few steps to create a cash flow forecast. Steps include:

    • Create the Cash Summary report in Xero

    • Export to Microsoft Excel in order to begin the cash flow forecast…

    Let the customization of individual cells and their data ensue!

The remaining zillion steps for customizing the forecast can be found here.

At the end of the process with the data that you’ve drawn, you’ll be able to forecast ahead for the next 12 months based on the average values across the historical time frame. From there, you can change the values for accuracy or to test out scenarios – sounds easy but your mileage may vary.

The core problem is that you’re left with a forecast based on what has happened in the past. While providing some value by helping to identify potential trends, a cash flow forecast built on past data offers little value to small business. It’s akin to driving into new territory while staring at the review mirror.

The second issue is that the dreaded spreadsheet can be tough to manipulate and even tougher to explain…and whenever someone talks about a broken formula, we wince because we know what painstaking work it’ll be to correct it. While Xero is software used by millions, cash flow forecasting is not the program’s strongest feature.

Ground ‘Xero’

As anyone in a small business knows, you’re basically running an experiment with the sample size of 1. You’re experimenting to see what works for your company in your market. This makes sales trends based on historic data really dicey to interpret and forecast. If you use your Xero past data to forecast, one outlier year or oddball month could skew your forecast numbers for years into the future. Think back over the last year. Have their been:

    • Changes in competition in your market

    • Changes in your market

    • Changes in your sales process

    • Changes in your sales team

    • Changes in the economy

These factors can all inaccurately affect a forecast constructed from your historical data

Want More Xero Cash Flow Visuals?

Boost Business with a Xero Cash Flow Add On

Just when you think you’ve explored all that Xero has to offer, look to Xero’s library of connected apps because you’re just getting started.

Xero knows what they do best, and when to turn it over to the forecasting pros. With a marketplace comprised of 500+ apps, there’s something for everyone but it pays to be choosy!

With Xero’s high-quality data and your clients’ needs in mind you can shoot for the moon. Why demo apps that port your Xero cash flow data into another static format? Instead, carefully filter and vet the apps in the list. Key look-fors in today’s business environment include:

    • Visual appeal and clarity

    • Manual control and flexibility to use, tweak and import data

    • Ability to toggle between the big picture and fine detail quickly

    • Collaboration capabilities for across the room or across the country

    • Ability to compare as many similar or vastly different scenarios as you need

    • A process to set and monitor your sales goals to empower your team

    • Functions to flag and manage slow periods

    • Capacity to construct an accurate budget – one that auto-repeats forever

    • Fast, easy to understand and a breeze to customize

The right app is really going to take it home for you and your clients. Finding one that is built to forecast cash flow is very important for your key financials:

Near term cash flow management: How do you manage invoices and bills? That is, largish sums of money that come into your account or leave. Mismanagement could leave you scrambling!

Mid-term cash flow set up: What does your sales forecast look like? Do you have enough work set up six months from now to keep everyone busy and billing without running idle, or into a personnel pinch due to being over capacity?

Long-term cash flow goals: What is your revenue and growth plan? What is going to fuel these plans? How can you create and follow strategy every day that will lead you in the direction of your goals?

Why Dryrun Might be a Fit for You

Dryrun is fast: A quick learning curve, reasonably fast set up and easy to maintain and lightning to render a new scenario, the software moves at your speed of business.

Dryrun is visual: You can now explain your evidence-based strategy because it’s displayed so much more clearly than in a spreadsheet. Dynamic and appealing, use Dryrun to underscore your strategy or to elicit opinions from your team.

Dryrun is cloud-based: And easy to use anywhere at all.

Still have doubts? Check out Ron’s story then hit us up at Dryrun to learn more or personal walk-through.

Who Needs to Visualize Cash Flow: Xero User Stories


I’m a recently graduated accountant at a mid-size firm in the US. My team and I are responsible for maintaining client relationships as well as pursuing new client relationships. Xero meets my needs for data tracking, however, it was only when I added a couple key Xero connected apps to my toolkit that I found it became much easier to boost business and reach out to new and existing clients.

Xero cash flow adds are a great way to give value, both to me and my clients. They give us a ‘common ground’ and easy talking points about their strategy and numbers. With a cloud-based app that can either integrate or stand alone, I know that we’re both looking at the same thing! – Ron

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