Business musings

Articles and thoughts about financial forecasting

Posted by Matt Stocker, stored in: Finance  Technology & Web  

Logo for Float. Image shows an illustration of a folded, brown paper boat floating on blue waves. The boat is flying an orange flag that reads, "£loat," in white lettering.This post is long overdue! Having been using Float—a fantastic cash flow forecasting tool—since late 2010 (first in beta and now in its full release), I have been meaning to blog about Float’s awesomeness for some time now.

In the interests of full disclosure, I’m proud to be a Founder Member of Float. This means that I believe in what they do and have voted with my feet by supporting them.

Float describe their vision as:

To make forecasting accessible for small business owners. Helping them avoid sleepless nights, painful spreadsheets and ultimately running out of money.

Whether big business or small, we all know how many headaches cash flow forecasting can cause but also how vital it is. Ultimately, cash flow forecasting should facilitate strategic and tactical decision making; it should allow you to accurately plan for the future because you know what the business can and can’t afford. Establishing a clear view on your finances also enables you to rapidly respond to changing scenarios because you’re able to see exactly how these changes cascade throughout your financial situation.

Such a perspective is vital. In start-up and bootstrapping environments, the necessity to manage your cash flow is clear (although, I have to say, I’ve met many businesses who remain remarkably complacent about cash flow management even when their backs are against the wall!). Possibly less evident is the importance of cash flow management even when a business is doing very well.

When profits are good and margins are high, it’s easy to become content about making hay while the sun shines—your finances seem to take care of themselves and managing the detail seems like an unnecessary chore. Inevitably however, overheads begin to creep and your expenditure starts to bloat. Your perspective on the future also becomes increasingly shortsighted. Where you were once planning budgets, investments and new ideas months, or even years, ahead, you begin to leave yourself open to surprises.

Why Float?

Back in the day, cash flow management typically relied upon spreadsheets and more than a little Excel wizardry! For those of us proficient in the world of formulas, functions and charts, this is doable but still incredibly time consuming. For others, it opens up a whole world of hurt!

Float aims to change all of this by making cash flow forecasts “easy, painless, and maybe even fun!” Seamlessly integrated with FreeAgent“heavenly online accounting”—Float removes much of the complexity and manual labour involved in the whole process.

There are “no formulas to understand, type in, or break!” and Float’s clean, intuitive, Web 2.0 style interface makes it a breeze to use. Unlike Excel, Float is online, so you can access it anytime, anywhere. It’s also quick to set up and, unlike many other financial planning tools, you don’t need any training or financial qualifications to use Float, so you can literally get started straight away. Colin and Phil (the founders of Float) are always on hand if you’ve got any questions too.

Image of an open Apple Macbook displaying Float on its screen. Float has a menu on its left-hand side, a graph of cash flow projections at the top and a table of numbers at the bottom.


Float particularly comes into its own when you consider the point at which future projections meet current reality. Using a cash flow forecast in Excel, you would need to constantly check that your spreadsheet figures match those of your bank account—does the theory match reality? Float, on the other hand, removes the need for manual checking. All of your transactions, balances and other accounting figures are imported directly from FreeAgent and categorised. This, combined with FreeAgent’s automated bank feeds from Barclays, means that you have streamlined, realtime financial planning at your fingertips!

Float, FreeAgent and Barclays

“But what if I don’t use FreeAgent or bank with Barclays?” I hear you cry.

To answer the first part of that question, part of the beauty of Float is its reliance upon FreeAgent. Much of the frustration inherent in using Excel (aside from the need to understand its functionality) is the amount of time involved in entering data manually and the mistakes that can creep in as a consequence. Float deals with this by pulling its data from FreeAgent and, personally, it’s one of the reasons that I love it most. There’s no way I’d have the time to keep an offline spreadsheet up-to-date and I’m a firm believer in using technology to improve efficiency, so why would I enter data manually when software exists that will do it all for me?

And, if you haven’t ever heard of FreeAgent or don’t yet use it for your accounting, I would highly recommend it! In the words of Ryan Havoc (Boagworld), “FreeAgent is a fully featured online accounting tool wrapped in a sleek, comprehensive and easy to use interface.” Kevin Partner of PC Pro also wrote, “It’s rare that I feel able to recommend a product unreservedly: this is one of those occasions.” Similarly, as I’ve written before, FreeAgent is a pleasure to use, makes life so much easier, and their customer support is second to none.

Float are also working towards integration with other cloud-based accounting packages, so further integration and availability is something that should be on its way.

Similarly, FreeAgent are working hard to support banks other than Barclays and, in the long term, they hope that all FreeAgent users will have automatic feeds no matter whom they bank with. Watch this space!

Planning for tomorrow and keeping an eye on today

Here at Matt Stocker Ltd, we’re passionate about helping organisations to plan for the future and Float’s philosophy very much fits with our own approach. As strategy consultants, we work with clients to build long term success; this includes minimising surprises, reducing risk and helping organisations to allocate their resources effectively.

Screen shot of the Float blog showing the article, 'Founder Focus #1: Matt Stocker'Back in April of this year, Float asked me to explain why I love Float and how I use it, and I was thrilled for my answers to be featured on their blog.

Float themselves say, “There is still so much more we can do to help business owners see into the future—and we are still hard at work.” As always, I’m excited to see what else is in the pipeline. Float has already come so far and, even since April, they’ve rolled out several new features.

Longer term, I’d like to see Float enable best practice for turnaround situations by providing a week-by-week view on an organisation’s cash flow. In the meantime, I know that they’re currently working on handling credit card transactions more effectively and several other ideas are underway.

Float really does have the potential to transform the world of cash flow forecasting in the same way that FreeAgent and Xero have transformed small business accounting.

RIP Excel! Long Live Float!—the start-up that’s making waves!

Sign up for Float and FreeAgent today

If what I’ve said has piqued your interest, why not sign up for Float and FreeAgent today…

Float offer a 30-day free trial, no credit card required.

And grab yourself 10% off at FreeAgent with our referral code 314yalfc or by clicking the link below:

FreeAgent Small Business Online Accounting



As businesses are starting to report a slowdown in sales and a weakening in their financial position, there has been a lot in the news about a serious recession pending for the UK, especially after the report from the British Chambers of Commerce.

So, how should you respond? Do you know how you can make your business stronger and more competitive and therefore better able to deal with a recession? Markets shrink in a recession so where there were lots of people wanting and willing/able to pay for your product or service before, there are now less people able to purchase what you have to offer. That means you are going to have to change your strategy to win the remaining customers and fight off your competitors.

Here are 5 steps to prepare your business for a recession…

  1. Plan for the future
    Don’t just meander along hoping for the best – plan! Your business will work best if you know where you are trying to go and what you are trying to achieve in the next 3-5 years. It doesn’t have to be a long, detailed or ‘impressive’ strategy, but it does require thought!
  2. Draw up an action plan on how to get there
    You will need decide on short, medium and long term actions out of the strategy you drew up. These are specific actionable things that you can start working on, starting immediately. There will be both big things that you can do to improve (break these down into manageable parts) and also lots of little things. Don’t forget to prioritise.
  3. Forecast your money
    Prepare a 3-year financial forecast or get someone to do it for you (like your accountant). Add in your costs and expected benefits from the action plan above. Even with a positive economy businesses often over-estimate sales, so be careful. Try cutting your revenue in half and see what it looks like; how would respond if that actually happened? Try cutting it in half again. Keep updating it monthly so you can see where you are against your plan. This will give you early warning of when you might run into problems. If things get really tight, then move from a monthly cashflow forecast to a weekly one, and watch your money like a hawk. When you see a problem do something about it in advance – don’t just wait for it to hit you!
  4. Spend time working on your business not in it
    In order to implement your plan you will need to starting working on your business. It’s the difference between say, restoring and renovating a house and just cleaning it. It can be hard work and uncomfortable knocking walls out, getting a plasterer in etc. but you end up with a much better house at the end of it. Don’t fall into the trap of just doing continual maintenance work when  actually there is significant change that needs to happen. Don’t get me wrong, maintenance is important but it won’t significantly push your business forward. Your business needs to be the best it can be in every area. If you don’t have time to do this, then you either need to make time or find someone to work with you to implement the action plan.
  5. Don’t stop marketing, just do it better
    As things start looking tight many companies start to reduce their marketing budgets. Proceed with caution on this one. You should do a separate 12-month marketing plan that links into both your strategy and your general business action plan. You might not know how effective your current marketing actually is; measuring its effectiveness can be hard but certainly not impossible. Marketing shouldn’t just be seen as a cost – it should bring in more business in monetary terms over the year than you spend on it. It is worth noting there are no silver bullets when it comes to marketing; it is about a consistent, focused approach in line with your branding and strategy (hence the plan!). By all means, put your marketing effort under the microscope and work to make it more effective, but don’t just cut it to cut costs; there is a real danger that you’ll end up cutting yourself off from your life blood – your customers!

Though it would seem that there are difficult times ahead, don’t panic and don’t give up. Times like these can actually be a real opportunity. Whilst you might worry about what is just around the corner, the fact that you are looking at what you can do about it now puts you in a much stronger position than most. This could be your opportunity to build a stronger, more resilient organisation and to outshine and outperform your competitors.