Pros, Cons, Alternatives & How We Can Help
At Angel Accounting Solutions Ltd, we’re passionate about helping business owners feel more in control of their finances, often by making the most of tools they already have. One Xero feature we’re frequently asked about is the built-in cash flow projection tool. It’s simple, accessible, and can be a great starting point for small businesses wanting a better handle on their day-to-day cash flow. But is it the right solution for everyone? Here’s a look at how it works, its strengths and limitations, who benefits most, alternatives on the market, and how we can help you take cash flow forecasting even further.
What Is Xero’s Cash Flow Projection Tool?
Xero’s cash flow projection tool is designed to give you a real-time, short-term look at your business’s financial future. By pulling data from your invoices, bills, and bank accounts already in Xero, it quickly shows your projected cash position over the next month or quarter, depending on your plan.
Who can use it?
- Ignite & Grow plans: 30-day cash flow projection
- Comprehensive plan: 90-day cash flow projection
This feature is available at no extra cost for users on those plans, making it a convenient option if you’re already a Xero customer.
The Pros: Where Xero’s Cash Flow Tool Shines
- Quick and simple to use: No need to enter data twice. It works directly with your existing Xero setup.
- Real-time updates: Your cash flow adjusts automatically as invoices are issued, payments received, and bills updated.
- Clear visual overview: Great for spotting cash shortfalls, overdue payments, and periods of tight cash flow before they happen.
- Included in many plans: No extra subscription fees for eligible users.
The Cons: Where It May Fall Short
- Short-term focus: You’re limited to 30 or 90 days, depending on your plan. There’s no ability to forecast for six months, a year, or beyond.
- Limited scenario planning: It can’t answer “what if” questions (like delayed payments, large new expenses, or planned investments).
- Basic reporting: No customisation for department, location, or project. It’s a straightforward overview, not a detailed forecast.
- Not suitable for complex needs: Growing businesses or those with seasonal income, multiple revenue streams, or planned expansions may quickly outgrow the tool.
Who Is Xero’s Cash Flow Projection Tool Best For?
Xero’s built-in cash flow projection tool is best suited for:
- Small businesses and startups looking for a quick, easy cash flow snapshot
- Business owners who want to avoid spreadsheets or additional apps
- Anyone needing help making confident day-to-day decisions based on real numbers
- Companies already using Xero for invoicing and bill payments
If you’re new to cash flow management, or you just want reassurance about the next 30–90 days, this tool can be a real confidence booster.
Alternatives: What If You Need More?
If your business needs more in-depth forecasting, like longer timeframes, scenario planning, or departmental breakdowns, there are excellent alternatives available, many of which integrate seamlessly with Xero:
- Float: Known for its clear, visual cash flow charts, scenario modelling, and easy-to-understand reports. Ideal for businesses ready to take cash flow planning up a notch.
- Futrli: Offers forecasting, reporting, and business insights. Great for those who want deeper analysis or to plan for multiple scenarios.
- Fathom: Best for growing businesses, especially those with multiple revenue streams or complex structures. Offers comprehensive forecasting and business intelligence.
- Spreadsheets: Still a good choice for bespoke needs or when you want complete control. But, they’re time-consuming and require manual updates.
Choosing the right tool depends on your business’s size, complexity, and growth plans.
How Angel Accounting Solutions Can Help
While Xero’s built-in tool is a fantastic starting point, many businesses reach a stage where they need more, and that’s where we come in. At Angel Accounting, we specialise in helping clients build out robust, customised cash flow forecasts tailored to their unique circumstances.
Here’s how we can support you:
- Personalised cash flow forecasting: We can help you model different scenarios (such as late payments, big investments, or hiring plans), so you’re never caught off guard.
- Long-term projections: Need to look ahead 6, 12, or even 24 months? We can create forecasts that provide real clarity on your future position.
- Integrated software solutions: If your business has outgrown Xero’s built-in tools, we can recommend, set up, and support advanced apps like Float or Futrli.
- Training & empowerment: We’ll walk you through your forecast so you feel confident using it, and can spot the warning signs early.
- Ongoing support: As your business evolves, so will your cash flow needs. We’re here for you every step of the way.
Final Thoughts: Which Option Is Best for You?
Xero’s cash flow projection tool is a brilliant way for small businesses to get started with cash flow forecasting, especially if you need a quick, visual overview of the next month or quarter. But as your business grows, your needs may outpace what this basic tool can offer.
That’s where expert advice makes all the difference. At Angel Accounting, we’re here to help you choose the right tools, build detailed forecasts, and plan for whatever the future brings, so you can run your business with greater confidence and less stress.
Want to get started with Xero’s cash flow tool? Or ready to take your forecasting to the next level?
Contact us for a friendly, no-obligation chat. Let’s make cash flow one less thing you need to worry about.
