Cash flow modelling software lets you use historical data from a time period to develop a forecast of your incoming cash from revenue. For SaaS businesses, you use your contraction monthly recurring revenue (MRR), churn, and average revenue per customer in addition to other transaction data to predict your future cash flow.

We’ve previously discussed creating a financial model that encompasses cash flow, operations, revenue, and forecasting. In that post, you’ll find everything you need to create a financial model that helps you operate your business. Leveraging a cash flow modelling software will help you simplify the process even further. 

If you’re a SaaS or eCommerce business, you have a unique situation with cash flow because of the importance of retention, recurring revenue, and dunning. Baremetrics has robust forecasting tools built indirectly, so you can have all of your SaaS reporting in one place. 

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Why does SaaS cash flow modelling matter?

Cash flow is an extremely important part of your SaaS financial model. Understanding your current and future cash flow allows you to determine realistic growth goals, improve your budgeting, and work with your salespeople to set goals. 

Rather than manually creating a cash flow model or sales model, you might choose to use a cash flow modelling software to reduce the amount of effort involved in these predictions. By using software with an AI algorithm or other automation, you can improve the accuracy of your financial model. 

Top Options for Cash Flow Modelling Software

If you’re trying to weigh your options for cash flow modelling software, you will probably come across a few options in your search. Here are some popular cash flow modelling software options in 2021, with pros and cons for each:  

Baremetrics

Baremetrics offers financial reporting tools designed specifically with SaaS and eCommerce businesses in mind. Baremetrics uses live data points rather than historical data to develop your cash flow model. By integrating directly with your payment processor, accounting tools, and eCommerce workflow, Baremetrics can update your forecasting model to account for fluctuations and the real-time situation of your business.  

In addition to cash flow, Baremetrics has a reporting dashboard that includes all the essential KPIs for SaaS businesses. Baremetrics has robust forecasting tools built indirectly, so you can have all of your SaaS reporting in one place. 

Start with a free trial to improve your revenue forecasting model. 

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Float

Float is a popular add-on that works in tandem with online accounting software like Quickbooks Online, Xero, and FreeAgent. Float works by importing transaction data from these sources, your accounts, and

The downside of Float is that it does not integrate directly with payment processors that work for recurring payments. Instead, it relies on accounting data when it comes to SaaS businesses. For SaaS and eCommerce businesses dealing with a high volume of transactions in a given time frame, the most accurate forecasting comes directly from transactional data. 

Quickbooks

For businesses using Quickbooks for accounting and invoicing, there is a cash flow forecast report available. You can define different data points that impact your business model and revenue projections to create your revenue forecasting report, including your accounts receivable, bank account balances, and credit card ledgers. Once the report is generated, revenue projections can be adjusted using historical data from any time window of your choice by adjusting the date range. 

When using Quickbooks, you have to generate your reports manually. If your accounting processes aren’t fully automated, you won’t always have the most accurate revenue forecasting when you use Quickbooks. 


Pulse

Pulse is one of the most robust web app options for revenue forecasting. Because Pulse is entirely dedicated to revenue forecasting, it’s a popular SaaS product for sales forecasting, cash flow forecasting, and budgeting. 

The forecasting methods Pulse uses require you to input your sales data manually or by uploading an Excel spreadsheet. It does not integrate directly with any other accounting software or payment processor, which is time-consuming and leaves the potential for human error. That said, once the data is input, Pulse does have extremely impressive options to break down your report in a variety of views and determine what works best for your business needs. 

Choosing revenue forecasting tools for your business

If you need to invest in your business’s operations, hire additional team members, or make a purchase, you need to know if you’ll have the liquid resources available. When you have a clear understanding of your cash flow, you can make important decisions about budgeting and sales goals.

Baremetrics lets you seamlessly combine forecasting, reporting, customer management, and dunning all-in-one dashboard with customizable views and live updates. 

If you’re ready to get started with a better sales forecasting tool for SaaS business, begin your free trial of Baremetrics today. 

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