Using the Cash Flow Planner in QuickBooks Online

The Cash Flow Planner in QuickBooks Online is a powerful tool that helps companies gain insights into their financial health, forecast cash flow, and effectively plan for their business. By leveraging this tool, you can enhance your financial planning, optimize resource allocation, and steer your business toward sustainable growth and success.

In this blog, we’ll explore the benefits and features of the QuickBooks Cash Flow Planner and guide you on how to use it for your business.

What is the Cash Flow Planner?

The Cash Flow Planner is a tool designed to help small businesses manage and forecast their cash flow effectively. Using your QuickBooks data and connected bank and credit card accounts, the Cash Flow Planner provides businesses with insights into their cash flow position, allowing them to better understand and plan for their financial future.

Key Features of the Cash Flow Planner

• Cash Flow Projections: The tool analyzes your historical financial data to generate accurate cash flow projections for a specific period. It takes into account factors like income, expenses, pending invoices, and upcoming bills.
• Scenario Planning: You can create multiple scenarios to evaluate different business strategies. For example, you can simulate the impact of hiring additional staff, launching a new product line, or increasing marketing expenditure. By comparing scenarios side by side, you can determine the most favorable course of action.
• Intelligent Insights: The Cash Flow Planner provides intelligent insights by highlighting potential cash flow issues and suggesting actions to mitigate them. It helps you identify specific areas where you can cut costs, negotiate better payment terms, or optimize your revenue streams.
• Customization and Flexibility: The tool allows you to tailor cash flow projections to your specific needs. You can adjust the forecast period, add or remove income or expense categories, and modify data inputs to reflect your unique business circumstances accurately.

Benefits of the QuickBooks Cash Flow Planner

• Improved Financial Planning: By providing accurate cash flow projections, Cash Flow Planner enables you to plan and allocate your resources more effectively. You can anticipate potential cash shortages or surpluses, allowing you to make informed decisions about spending, investment, or expansion plans.
• Enhanced Decision Making: With the ability to create multiple scenarios, you can assess the impact of different business strategies on your cash flow. This empowers you to evaluate the viability of new projects, analyze the effects of pricing changes, or simulate various market conditions before making critical business decisions.
• Proactive Cash Management: The QuickBooks Cash Flow Planner alerts you to potential cash flow issues, such as upcoming bills, late payments, or outstanding invoices. By staying ahead of these challenges, you can take proactive steps to ensure smooth operations, maintain positive relationships with vendors and clients, and avoid unnecessary penalties or cash shortages.
• Clear Visualization: Visual graphs and charts within the Cash Flow Planner present your cash flow projections in a user-friendly and easily digestible format. This visual representation allows you to identify trends, spot patterns, and quickly grasp your financial situation, even if you’re not an accounting expert.

How to Use the Cash Flow Planner

To get started, click on Cash flow from the left menu bar and then select Planner. Next, click the Start planning button on the Planner.

Using the Cash Flow Planner in QuickBooks Online

Using the Cash Flow Planner, you have the option to view either your cash balance or the Money in/Money out summary. 

Viewing either your cash balance or the Money in/Money out summary in the Cash Flow Planner

• Cash Balance: When you choose to view your cash balance in the Cash Flow Planner, you can monitor the actual amount of cash you have available at any given time. This option provides a snapshot of your current cash position and allows you to assess your liquidity. By tracking your cash balance, you can quickly determine if you have sufficient funds to cover expenses, make necessary payments, or invest in growth opportunities.
• Money in/Money out: Alternatively, you can choose to view the Money in/Money out summary in the Cash Flow Planner. This option focuses on tracking the inflows and outflows of cash over a specific period. It provides insights into the sources of your cash, such as sales revenue, loans, or investments (Money in), as well as the destinations of your cash, such as expenses, bills, or debt repayments (Money out).

Specify the period for which you want to project cash flow, considering seasonal variations or specific business events. You can the scenario planning feature to create different business scenarios. Adjust variables such as sales growth, expense reductions, or new investments to see how they affect your cash flow.

Based on the insights gained from the scenarios, make informed decisions and take necessary actions to optimize your cash flow. For example, you may decide to adjust pricing, renegotiate vendor contracts, or revise your marketing strategies to align with the most favorable scenario.

For more detailed instructions on how to use the Cash Flow Planner in QuickBooks, watch the video below.

Bottom Line

By providing accurate projections, scenario planning capabilities, and intelligent insights, the Cash Flow Planner empowers entrepreneurs to make informed decisions and proactively manage their cash flow. By leveraging this tool effectively, you can enhance your financial planning, optimize resource allocation, and steer your business toward sustainable growth and success.