Chapter 8. Forecasting and Projections in QuickBooks


  • Using the Cash Flow Projector and the Forecast Report

  • Going Outside QuickBooks to Project Receipts

The flow of cash in and out of your business is an important gauge of how well you manage your resources. In an established business, it's not as crucial as net income and working capital, but it's still an important way to judge how well you're managing the process of turning products into cash and reinvesting in the business.

Cash management is even more important in the early days of a business, because the cushion is usually fairly thin. And if there's some way to forecast how much money is going to hit the Undeposited Funds account during the next month or two, well, that could be comforting information. Is there a good way to find out? Yes and no — read on.

Using the Cash Flow Projector and the Cash Flow Forecast Report

If you explore the QuickBooks menu structure, you'll find several menu items that refer to forecasting: Set Up Forecast, Cash Flow Projector, Cash Flow Forecast, and so on. It's not necessary to explore all the fine distinctions between these procedures and these reports, but these two are useful when you need to watch your cash position: the Cash Flow Projector and the Cash Flow Forecast report.

Each tool brings something different to the job of forecasting your company's cash position. The Cash Flow Forecast report is more rigid than the Cash Flow Projector, but it does a better job of informing you ...

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