Why We Love Xero's Short Term Cash Flow Feature

Posted by Kelvin Gieck September 4, 2019

Kelvin Gieck

Xerocon is always an exciting time of year. Outside of the general excitement at the event, and the great opportunities to learn and network, there are often product releases, updates and hints as to where the system is heading (I’m not going to lie, I definitely have FOMO not being there).

This year in Brisbane (2019 for posterity), there was one specific announcement that got our team here at Helm particularly excited: Xero’s new short term cash flow feature (being piloted these next few weeks from what we hear).

Xero Short Term Cash Flow Feature Image

Photo courtesy of @mattpaff

What Xero’s Cash Flow Feature Does And Doesn’t Do

In terms of what this new feature does, let’s take a quick look at Xero’s own blog post:

“This feature will visually project the user’s bank balance 30 days into the future, showing the impact of existing bills and invoices that are paid on their due dates.

Users will be able to choose a bank account and switch between a 7-day and 30-day view. They’ll also see the impact of paying a bill today versus next week, and know which invoices they should follow up on again to help with cash flow this month.”

Based on the above description, Xero’s Cash Flow Feature won’t yet:

  1. Allow future predictions of accounts receivable and accounts payable items (“bills and invoices”) based on anything other than due dates.
  2. Consider predictions around non-invoice items (i.e. anything other than “bills and invoices”). Examples being cash coded items such as rent, salaries and many other auto debits (utilities, etc.).
  3. Predict or consider future looking items that happen after “today”. Put another way, cash balances, accounts receivable and accounts payable make up the basis of the cash you have “today”. Your accounting system information does not consider tomorrow.
  4. Give insights beyond 30 days.
  5. Allow manipulations in predictions without affecting the source documents (again, the “bills and invoices”).
  6. Compare forecasts or predictions to other “what if” scenarios.

So, what Xero has developed is a native dashboard that maps out the timing of accounts receivable and accounts payable for the next 30 days. This will no doubt be super useful to the general Xero user base as they likely have no optics on future cash flows (hence the reason why 80% of all businesses fail over 10 years regardless of industry, geography or time).

What Helm Does

But what about the bookkeepers, accountants and advisors that want to provide cash flow forecasting and cash management as a service? As it sits, the feature set of Xero’s short term cash flow tool isn’t robust enough to help these users.

Ultimately, this is what excites us most about Xero’s move. It’s bringing greater awareness around cash flow to the general market, and our “competing” offering, Helm, compliments their service extremely well (shout out to Xero’s own Nick Houldsworth here… “third party innovation = future source of customer value”).

Helm is a robust cash planning tool that allows users to quickly and easily manage their cash position. It automates a large portion of the forecasting function, still provides users with multiple ways to fine tune their forecasts and also allows the creation of unlimited scenarios for comparison of cash plans.

The most unique aspect of Helm is that it enables all of this functionality in a highly interactive format. Instead of tediously punching in data, you can manipulate your forecasts with simple drag and drop movements.

In a nutshell, Helm excels in allowing professionals to provide cash flow forecasting and cash management services to their clients in a highly collaborative way (it’s all about the relationship!).

Xero Helm Comparison

The Future

We can’t wait to see what Xero (and others) come up with in the cash flow forecasting space. As an industry, we have no doubt that we can come up with innovative solutions that will ultimately see more small businesses succeed. And at the end of the day, that is what we are all striving for: genuinely helping others and lifting ourselves up in the process.

Kudos Xero.

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