Forecasting Cash Flow in QuickBooks Online

cash flow forecasting in QBO main image

The average small business owner might not be as familiar with cash flow as they should. However, if you’ve got an awesome accountant and/or bookkeeper on your side, they can wax poetic on the virtues of a good cash flow projection.

Once a business starts forecasting cash flow, they’re quickly inspired and empowered by the insights it provides. This is why PayPie has included both monthly and daily cash flow forecasting within its analytics dashboard.

Accountants and bookkeepers who use QuickBooks Online (QBO) know that the Cash Flow Projector tool is only available within QuickBooks Desktop. But hope is not lost! In this article, you’ll learn how to use PayPie to project cash flow by simply connecting a business’ QBO account.

Creating a cash flow forecast in QBO

Put down the pen and paper. Forget about opening Google Sheets or Excel. Simply sign up for PayPie, then connect the business’ account. Forecasting cash flow is really that easy.

The app will then do a deep dive on the business’ financial data, looking at hundreds of variables. (And we’re just getting started…) The assessment of these variables is then presented in a unique analytics dashboard, with all of the cash flow metrics detailed in the cash flow tab.

main dashboard cash flow tab

Learn more about the PayPie QBO integration

Forecasting cash flow — monthly projections

The data for the monthly cash flow forecast pulls from the company’s income statement, balance sheet and cash flow statement. The graph shows three months of actual cash flow and another six months of forecasted cash flow. The forward-looking projections are based on the numbers from the previous three months.

Cash flow is broken into the three main categories:

  • Operating cash flow — inflows and outflows related to the sale of goods and services.
  • Investing cash flow — inflows and outflows that stem from the sale or purchase of capital investments.
  • Financing cash flow — inflows and outflows from borrowing activities or external investors.

Monthly changes in cash flow also helps identify patterns in order to leverage peaks and overcome the valleys.

cash flow forecasting monthly projections

Forecasting cash flow — daily projections

The daily cash flow projection shows the beginning and ending cash balance for each day — based on current and previous data in the business’ main financial reports.

Daily projections help you get more granular in your cash flow analysis. For example, a pattern of negative cash flow days can help pinpoint if a business is giving their vendors more time to pay than their debtors are giving them.

cash flow forecasting daily projections

5 reasons to use PayPie for cash flow forecasting.

Analyzing cash flow — accounts receivable

Receivables and payables are key components of cash flow. With PayPie you can generate an assessment of each one. Assessing accounts receivable helps identify overly generous credit terms and outstanding invoices that negatively impact cash flow and a business’ overall financial health.

In the accounts receivable analysis, you’ll be able to quickly access:

  • Total invoices raised — for a period of 12 months, regardless of whether the invoices are open or closed.
  • Monthly invoices, payments and open AR — laid out in a convenient bar graph. (Open AR = (previous month’s open AR + current month’s invoices) – payments.)
  • Top five exposures — showing which customers represent the highest amounts of outstanding invoices.

accounts receivable

Analyzing cash flow — accounts payable

Just as accounts receivable shows inflows, accounts payable details outflows. Crucially, if there are late payments which affect the business’ short- and long-term credit profile, as lenders base their conditions on previous payment histories.

The accounts payable analysis features:

  • Total bills received — for a period of 12 months, regardless of whether the bills are paid or unpaid.
  • Monthly bills, payments and open AP — laid out in a convenient bar graph. (Open AP = (previous month’s open AP + current month’s bills) – payments.)
  • Top 5 exposures — showing which vendors represent the highest amounts of outstanding bills.

accounts payable

Comparing income to expenses

In order to provide a historical and top-level perspective, PayPie also graphs total income and expenses for a period of 12 months. This yet another way to highlight trends, such as when expenses either exceed or come close to surpassing income.

income and expenses

Generating a breakdown of expenses

Delving further into examining cash outflows, PayPie’s cash flow analysis also breaks down expenses on a monthly basis, displaying 12 consecutive months. It’s a quick way to provide a snapshot of a business’ main expenses throughout the year.

expense breakdown

Handy reference — basic cash flow terms and concepts.

Creating a cash flow statement in QBO

If all you want to do is create a cash flow statement, simply go to the QBO reports tab and select “statement of cash flows.” However, why have just a cash flow statement when you can have a comprehensive cash flow forecast? Plus, our dashboard includes a cash flow statement as well.

cash flow statement in dashboard

Assessing credit risk

The main question that PayPie’s financial analysis answers is, “How does my business look in front of lenders?” We provide insights into cash flow as it’s closely tied to determining the business’ ability to manage its finances and credit.

However, our algorithm also examines a range of variables related to risk in order to create a proprietary risk score. Unlike traditional credit scores, it’s based on a business’ own real-time accounting data, instead of third-party sources. It doesn’t replace a traditional credit score. Instead, it serves as an internal benchmark of how the business is currently performing.

If a business is planning grown and knows that it’ll need funding in the future, it can use the risk score and the insights from the assessment to be better prepared when applying for financing.

risk score

Taking action through insights

If you’re taking the time to forecast cash flow and evaluate risk, you’re already interested in troubleshooting. But you’re also interested in solutions as well. This is why PayPie also includes a list of targeted insights, that pinpoint problem areas which need to be addressed.

These insights into financial health and borrowing capacity include:

  • Cash flow coverage ratio — the ability to pay interest and principal amounts on borrowed funds.
  • Creditor days — the average amount of time needed to settle debts with trade suppliers.
  • Current ratio — the ability to meet short-term debt obligations within the next 12 months.
  • Debt-to-equity ratio — shows how much debt is used to run the business as well as the value of the assets compared to the debt.
  • Debtor days — how long it’s taking to collect payment from debtors.
  • Interest coverage ratio — determines how easily a business can pay interest expenses on outstanding debt.
  • Leverage ratio — how much operating and financing leverage a business has in order to manage debt or acquire additional funds.
  • Net worth — the total value of the assets after all debts are paid.
  • Return on capital employed — how well a business’ capital investments are paying off.
  • Revenue growth — compared year over year.

insights (2)

Start forecasting cash flow today. Sign up for PayPie and connect your business.

PayPie’s cash flow forecasting is currently free. In the future, each user will be limited to two businesses. Volume pricing for accountants and bookkeepers will also be introduced.

In the meantime, try it out and let us know what you think. We mean it, we value your feedback.

QuickBooks and QuickBooks Online are registered trademarks of Intuit Inc. PayPie integrates with QuickBooks Online. It does not integrate with QuickBooks Desktop. 

The information in this article is not financial advice. It does not replace the expertise that comes from working with an accountant, bookkeeper or financial professional. 

Stock image via Pexels. App images via a PayPie demo account. 

PayPie’s QuickBooks Integration – What You Need to Know

PayPie QuickBooks Online Integration

They’re not media darlings or mythical unicorns, they’re the hard-working people giving everything they’ve got to make their businesses a success. In fact, 99% of all the businesses in the world are small businesses.

In spite of their diligent efforts, 60% of small to medium-sized enterprises (SMEs) that fail point to cash flow. There’s also lack of funding to bolster cash flow with 1 in 5 SMEs being turned down by banks and traditional lenders. What’s worse, is that many SMEs don’t know the reasons why or even how to improve their chances.

The power of a one-click risk assessment  

There’s no question that QuickBooks Online is a smarter business tool for the world’s hardest workers — small business owners. That’s why PayPie is excited to integrate with QuickBooks Online to offer these businesses powerful, intuitive, one-click risk assessment — based on a business’ own first-hand accounting data.

While expense tracking, payments and other day-to-day business functions can be easily automated, if an SME wants to know their business credit rating, they have to rely on an outdated system based on second-hand information. That is, until now.

With PayPie all you have to do is create a PayPie account, then connect your QuickBooks Online account. It’s that simple and your near-real-time credit score will be generated in seconds.

main dashboard

Hundreds of variables, one concise indicator

PayPie analyzes the financial data in the business’ QuickBooks Online account. Our application sorts the data into key variables and indicators, which are then further divided into two main categories — risk assessment and cash flow analysis.

The risk score, the focal point of the dashboard, is a capstone or synthesis of all the risk assessment variables. Like a car odometer, the risk score shows if the business is accelerating, resting at a comfortable cruising speed or losing momentum.

The table below breaks down some of the variables and indicators that PayPie uses to assess risk — factors that small business lenders often use their own assessments:

elements of risk assessmen

The added value of cash flow forecasting 

Risk assessment is to cash flow as a chicken is to an egg. You can’t have one without the other. Businesses need cash flow to survive. As such, they need to be aware of exactly how and when the cash flows in and out of their business. Cash flow forecasting also helps businesses predict when they’ll need funding — letting them plan and prepare to apply for these funds more effectively.

PayPie helps SMEs monitor cash flow by:

  • Detailing accounts receivable and payable exposures.
  • Comparing income to expenses.
  • Analyzing categories of expenses.
  • Projecting monthly cash flow.
  • Providing a daily cash position.

AR days overdue

Daily cash flow forecast

Learn 5 reasons why you should use PayPie for cash flow forecasting

Risk assessment that includes solutions

In developing their analytics dashboard, PayPie didn’t want to provide just a series of charts and graphs alone. They also wanted to offer solutions. This is why each assessment also includes a list of insights that show businesses which goals they’re achieving and where they’re reaching their goals and where they can improve.

Our insights that help SMEs improve their financial health and increase their chances of getting the funding they need include:

  • Evaluations of key liquidity ratios.
  • Comparisons to industry benchmarks.
  • Generation and investment of operating cash flow.
  • Debt and repayment indicators.
  • Return on capital employed.

risk assessment with insights

Financial tools for businesses, accountants and bookkeepers

Any business, accountant or bookkeeper using QuickBooks Online can use PayPie’s risk assessment and cash flow forecasting. We want to put these tools into the hands of the people who need them the most — whether it’s the businesses themselves or the financial professionals who consult and advise them.

Unless you’ve been stranded on a desert island or huddled in a safe room, you know that technology is set to transform accounting. This “Fourth Industrial Revolution” will also change the relationship between accountants, bookkeepers and businesses.

When all the basics are covered and simplified by automation, there’s more time to focus on conceptual and insight-based tasks, like cash flow consulting. The more businesses know about their current and future cash flow, the more able they are to make strategic, data-backed decisions.

Learn more about how cash flow consulting benefits businesses and accountants alike. 

Look better in front of lenders.
Improve your cash flow.
Grow your business.

“Every day, small businesses struggle with a lack of accurate and efficient ways to assess risk and accesss funding. We’re leveling the playing field so that SMEs can seize upon further opportunities for growth.”
Nick Chandi, PayPie CEO and Co-Founder

We invite you to try PayPie and we can’t wait to hear what you think

See more reviews and insights via FitSmallBusiness

In addition to our listing in the QuickBooks App Store, you can also learn more about PayPie in our listing within the 2018 Small Business Accounting Software Reviews & Pricing Guide.

QuickBooks, QuickBooks Online, QuickBooks Connect and the Small Business App Showdown are registered trademarks of Intuit Inc. 

The information in this article is not financial advice. It does not replace the expertise that comes from working with an accountant, bookkeeper or financial professional. 

A New Era Begins

We’ve come a long way since this all has started. Partnerships, team expansions, development, Alpha release, and even a brand new house – our revamped website. PayPie has been through a lot during all this time and, along with it, our beloved community composed by some of the most passionate and fearless supporters that any company can have has kept always moving forward no matter what. Steadily. Strongly. Imperatively.

Now, at the dawn of a new era for the blockchain fintech scene, emerges a giant. Beta. Beautiful. Bombastic. A landmark in the history of the entire crypto world regardless of nation, community, or industry. A giant born with the greatness of a ground-breaking Intuit partnership to forever change the blockchain landscape.

Welcome to PayPie Beta. PayPie has partnered with the fintech powerhouse Intuit to deliver a QuickBooks Online integration straight at Beta launch. PayPie will now have instant access to millions of QuickBooks Online business users as potential customers since the very beginning. QuickBooks is one of the largest business accounting software in North America having over 80% of market share in the USA. Its online version accounts for a considerable piece of that and follows the latest industry cloud trend.

Small and medium-sized enterprises will be able to instantly connect their QBO accounts to PayPie to have access to their unique PayPie credit score and analytics insights to improve their business’ finances. SMEs’ real financial data histories will be assessed in near-real time by our automated credit risk assessment algorithm and their credit scores will be hashed to the Ethereum blockchain for ultimate transparency.

PayPie’s initial credit assessment and financial analytics insights are live now and available to all small SMEs using QBO as their primary accounting solution in the USA, Canada, UK, and Australia. Once businesses are all set on the platform, they will be able to sell their invoices in the marketplace to have access to fast and affordable funding from global invoice buyers. Our beta platform is live to be experienced with test tokens and improved functionalities will be introduced in stages, including turning the switch to real token usage.

PayPie’s legal team remains closely working with our local authorities to solve any outstanding aspects of the platform and we are willing to take the necessary steps and abide by required regulations safeguarding for the long-term best interests of the company and of our token holders’ community. Our bright future awaits and it will always be built on solid and responsible foundations.

The horizon is coming and it belongs to PayPie. Our marketing outreach starts this week and a comprehensive approach will come to place. Beta is a nice and shiny platform still in very early stages and there are plenty of more developments to come. In last few months, many amazing talents have joined our ranks including a former Goldman Sachs executive with expertise in credit risk assessment with specific expertise background in the invoice factoring industry. We are serious about disrupting the ways that businesses improve their finances and we are going big at it.

Enjoy Beta! We are just getting started!

 

 

 

 

PayPie Launches Its Live Beta With QuickBooks Integration

VANCOUVER, BC, April 30, 2018 – PayPie announced today that the Beta version of upcoming fintech blockchain platform was officially launched with a working QuickBooks Online integration out of the gates. PayPie’s initial credit assessment and financial analytics insights are live now and available to all small and medium-sized enterprises (SMEs) using QBO as their primary accounting solution in the USA, Canada, UK, and Australia.

PayPie is disrupting the way SMEs improve their finances and tackle ongoing cash flow problems. The platform’s Beta allows businesses to seamlessly connect their QuickBooks Online accounts to PayPie to have access to a completely automated financial analysis. The platform’s credit risk algorithm evaluates multiple data points based on the company’s financial history and harnesses the power of blockchain technology to assign each business a unique PayPie credit score for ultimate transparency and reliability. SMEs also receive a complete set of analytics of their financial performance followed by custom insights on how to improve their finances.

“SMEs have a real need to constantly improve their finances and access affordable financing to maintain a healthy cash flow, but that’s often a challenge that most businesses struggle to overcome. By partnering with the fintech powerhouse Intuit to deliver a QuickBooks Online integration at Beta launch, PayPie instantly enables a service to help millions of QBO users to achieve a transparent understanding of how to improve their finances while also providing them with fast and affordable business financing possibilities to come,” said PayPie’s CEO, Nick Chandi.

The PayPie platform aims to enhance financial opportunities for millions of SMEs worldwide and to connect them with a multitude of prospective invoice buyers who can make better-informed decisions on its unique built-in credit risk assessment.

ABOUT PAYPIE

PayPie empowers SMEs to improve their cash flow through prospective access to affordable business financing, insightful analytics, and credit scoring powered by blockchain technology. The platform brings ultimate trust and transparency to the fintech scene by introducing its unique blockchain-powered credit risk assessment based on near real-time business accounting data. PayPie released its Alpha version in January of 2018 and its Beta version in April of 2018. For all things PayPie go to https://www.paypie.com/