Table of Contents
- Introduction to Cash Short Predictor
- Main Components of Cash Short Predictor
- Short-term Forecast
- Cash Short Simulation
- Working with Forecasts
- Best Practices and Tips
Introduction to Cash Short Predictor
What is Cash Short Predictor?
The Cash Short Predictor is a sophisticated forecasting tool that provides businesses with comprehensive insight into their cash flow position and potential risks. This tool seamlessly integrates actual accounting system data, budgeted transactions, and customizable simulations to deliver a clear picture of your company's financial health over a three-month horizon.
Core Functionality
The tool's primary function is to serve as an early warning system for potential cash flow issues. By analyzing your current financial position alongside upcoming transactions and commitments, it can identify potential cash shortages weeks or even months before they might occur. This foresight allows businesses to take proactive measures rather than reactive solutions to cash flow challenges.
Interactive Simulation
A key feature of the Cash Short Predictor is its interactive simulation capability. Users can create and test various financial scenarios without affecting their accounting system data or budget forecasts. This allows you to explore the impact of different business decisions or potential market changes on your cash position in a risk-free environment.
Real-time Integration
The system combines multiple data sources, including current bank balances, pending transactions, and budgeted items, to provide real-time insight into your cash flow situation. This integration ensures that your projections are based on the most current and accurate information available, while the automated risk analysis system continuously monitors your projected cash position and flags potential issues through clear visual indicators.
Main Components of Cash Short Predictor
Screen Structure
The Cash Short Predictor screen is organized to provide a clear view of your cash flow forecast for the current month and the following three months. The screen is divided into two main sections: the Short-term Forecast Chart in the upper portion and the Cash Short Simulation area below, creating an integrated view of your projected cash position and detailed transaction information.
Essential Controls
The screen includes key controls for refining your analysis. The currency selector enables you to view forecasts in different currencies, while the date selection in the chart allows you to focus on specific time periods and view their corresponding Risk Scenarios. These controls help you examine particular aspects of your cash flow forecast with precision.
Additional controls are available through the menu:
- Recalculate projections: Manually refresh your forecast calculations
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See long-term/detailed forecast: Access a detailed view of account balances and cash flows
- Daily view: Detailed day-by-day breakdown
- Weekly view: Week-by-week analysis
- Monthly view: Extends up to one year, showing monthly balances and cash flows
- Export current simulation result: Download your current simulation data
Short-term Forecast Chart
The chart presents a visual representation of your projected cash balance through a three-month period. A purple line traces your overall balance trajectory, while a credit line indicator helps you monitor your available credit position. The chart features interactive markers that highlight potential cash flow issues, allowing you to click on specific dates for detailed analysis.
Cash Short Simulation Area
The simulation area provides a detailed transaction-by-transaction view of your cash flow, displaying from the most recent date onwards. Each transaction shows its cash flow details and contribution to the running balance, with links to more detailed transaction information. When you select a date on the chart, this area automatically updates to show the Auto Risk Scenario for that specific date.
At the top of the screen, you can quickly access overdue transaction information through summary links, view your current monitored budget through the budget link, and use the search filter to find specific transactions. This creates a seamless connection between your cash flow management tools.
As a simulation workspace, this area offers comprehensive control over your cash flow projections. You can add new transactions, edit or hide existing ones, and manage your changes through Save Changes, Reset, and Review functions. These simulation capabilities allow you to test different scenarios and understand their impact on your cash position before making permanent changes.
Short-term Forecast
Short-term Forecast Chart Overview
The Short-term Forecast chart provides a visual representation of your projected cash position for the current month and the following three months. The purple line shows your projected overall balance trajectory, while an orange dotted line indicates your total credit line limit when set. This credit line serves as an important threshold - the system only identifies cash shortfalls when your balance falls below this credit line. The chart incorporates various markers to highlight potential cash flow risks and account-specific issues across your forecast period.
Understanding Chart Indicators
Overall Cash Shortfall Indicators (Red or Amber Circle)
The chart uses red or amber circles to warn of potential overall cash shortfalls:
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Red Circle (🔴): Indicates high-risk shortfall within 1 week
Example: If you expect £23,000 cash-in on 22 November and your projected balance for 23 November is £20,000, failing to collect these payments could result in a -£3,000 position, triggering a red marker on 23 November.
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Amber Circle (🟡): Shows medium-risk shortfall within 4 weeks
Example: With £10,000 expected between 1-15 November and no cash-ins planned for 15-21 November, missing collections within this 4-week period could lead to a -£2,000 position on 22 November, showing as an amber marker.
Account-Specific Warning Markers (Red or Amber Cross)
Red or amber cross markers indicate potential issues with specific accounts, even when your overall balance remains healthy:
- Red Cross (✗): Individual bank account shortfall
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Amber Cross (✗): Credit card account shortfall
Example: If your company's overall balance is £10,000 on 7 January, but a specific bank account shows -£5,000, that date will display a red cross.
Note: These markers consider all cash flows in your selected currency, and cross markers only appear on days when the position reaches the credit line.
Forecast Details Analysis
When you click any date or marker on the chart, the Forecast Details panel appears, showing three critical components of your cash position:
Overall Balance
The Overall Balance section provides a clear snapshot of your cash position for the selected date, including the opening balance, net cash flow for the day, and projected closing balance.
For deeper analysis, you can click the Net Cash Flow amount to view a detailed breakdown of all transactions occurring on that date.
For example, clicking on a Net Cash Flow of -£20,057.50 would expand to show the individual transactions making up that total, such as a Fixed Asset purchase of -£20,000.00 and an Operating Expense of -£57.50. This detailed view helps you understand exactly what's driving your daily cash position.
Worst Case Scenario
The Worst Case Scenario analysis helps you proactively manage cash flow risks by identifying potential payment collection issues. The initial view shows a summary alert indicating the number of payments that could affect your cash position.
Clicking "Show Details" expands this section to provide comprehensive risk analysis information.
In the detailed view, you can see:
- A list of at-risk payments that need to be collected, showing their dates, types, contacts, and amounts
- The Worst Case Balance calculation, showing your potential position if these payments are not received
- An improved balance scenario that includes potential overdue collections (click the "overdue cash-in payment(s)" link to view a list of overdue payments that could help cover this risk)
- Specific suggested actions to help prevent the cash shortfall
For example, when showing 3 at-risk payments totaling £22,576.25, the system calculates a potential Worst Case Balance of -£2,054.08. However, if overdue payments are collected, this could improve to £16,649.65. This analysis helps you prioritize collection efforts and plan appropriate actions to maintain healthy cash flow.
Bank Account Balances
The Bank Account Balances section starts with a summary view of your accounts.
Clicking "Show Details" expands this section to provide a comprehensive view of your cash position across all accounts, along with suggested actions when issues are detected.
The detailed view shows for each account:
- Net Flow: Daily cash movement for each account
- Closing: Projected end of day balance
- w/o In: Position excluding expected incoming payments on the specified day
For example, the display shows: - Business Bank Account with a negative net flow of -£8,436.37 leading to a negative closing balance of -£4,970.19 - Business Savings Account maintaining a positive balance of £17,500.00 - Credit Card showing a negative position of -£1,960.00
Based on these positions, the system provides specific suggested actions such as fund transfers between accounts, exploring short-term loans, or requesting credit line increases to address potential shortfalls.
When credit lines aren't set up, you can click the "Set up" link next to each account to configure credit line settings. Having credit lines properly set up is important as they serve as thresholds for cash shortfall warnings.
Cash Short Simulation
Overview and Purpose
The Cash Short Simulation area is a powerful tool designed to help you understand and manage your future cash position. It displays all transactions affecting your cash flow for the current month and the following three months, allowing you to create various scenarios without impacting your accounting system data. This forward-looking approach enables you to make informed decisions about your cash flow management and test different strategies before implementation.
Understanding the Simulation View
The simulation area presents a chronological list of all transactions that impact your cash position. Each transaction row shows essential information including the date, transaction type, associated contact, reference numbers, and cash flow amounts. The running balance is automatically calculated and displayed, helping you track the cumulative impact of all transactions.
Transaction status is clearly indicated through different labels, each representing the source and nature of the transaction:
- In Budget: Forecast transactions generated from your budget plans
- Authorised: Approved transactions from your accounting system that are part of your forecast
- Draft: Pending transactions from your accounting system included in your forecast
- Paid: Future-dated transactions that have already been paid in your accounting system
- Partially Paid: Future-dated transactions that have been partially paid in your accounting system
- Overdue: Delayed incoming or outgoing payments added through the simulation feature
- Added: New transactions created within the simulation feature
The system also uses visual indicators to track simulation changes: a green circle (🟢) marks temporary modifications that exist only during your current session, while a black circle (⚫️) indicates changes that have been permanently saved to your projection.
When you have temporary changes, a numbered badge appears next to the Save Changes button showing how many changes are pending. This reminder helps prevent accidental loss of important modifications. However, if you're just running temporary simulations and don't need to preserve the changes, you can simply ignore this indicator.
Managing Your Simulation
The simulation area provides comprehensive tools for managing your cash flow projections through several key functions:
Updating Existing Transactions
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Edit (Pencil icon): Modify existing forecasts or simulations
- Can only modify date or amount
- For "In Budget" items: Can only select dates within the same month as the original, from today onwards
- For other items: Can select any date from current month up to three months ahead
- Amount must maintain the same sign as original (positive/negative)
- Zero amounts not allowed
- Modified dates and amounts are displayed in bold italic to easily identify changes
- Important: After modifying a date or amount, be sure to click the Confirm button (check mark icon) to apply your changes. If you want to cancel your modification, you can click the Cancel button to revert to the original value
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Hide (Eye with shadow icons)/Unhide (Eye icons): Temporarily exclude transactions from projection
- Hidden transactions appear grayed out
- Can be restored using Unhide function
- Hidden overdue transactions return to the overdue list
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Delete (Trash icon): Remove simulation-added transactions
- Only available for newly added transactions
- Deleted transactions must be re-entered if needed again
Adding Transactions
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Add Overdue Transactions
- Add multiple overdue transactions simultaneously
- Default date set to today (can be modified using Edit function)
- Already simulated transactions appear grayed out in the list
- Saved transactions are no longer treated as overdue in CaFE
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Add New Cash Flow
- Enter completely new transactions
- All fields except Contact are mandatory
- VAT calculations handled automatically based on settings
These powerful addition features enable you to:
- Test the impact of delayed payments on your cash position
- Plan and prepare for upcoming expenses
- Evaluate different timing scenarios for large transactions
- Assess the effect of new business opportunities on your cash flow
Through these simulation capabilities, you can thoroughly test different scenarios and understand their impact on your cash position before making permanent changes.
Managing Changes
The simulation tool includes a robust change management system that handles both temporary and permanent modifications to your projections.
Save Changes
Temporary changes allow you to quickly test scenarios without committing to them - these modifications disappear when you log out, making them perfect for quick "what-if" analyses. When you want to make permanent changes, the Save Changes function applies your modifications to the projection, making them visible to all users and incorporating them into future calculations.
Reset and Review
The Reset function allows you to discard temporary changes before they're saved.
For changes that have already been saved, the Review Changes feature provides a comprehensive history of modifications, showing:
- Original and updated transaction details
- When changes were made and by whom
- Status and type of modifications
Even after changes have been saved, you can still reverse them through the Review Changes screen. Simply select the changes you want to revert using the checkboxes on the left, and click the Reset Changes button. This flexibility allows you to maintain full control over your projections even after changes have been saved and shared with other users.
Working with Forecasts
Detailed Cash Flow Analysis
When clicking on individual cash flow amounts in the simulation area, you can access detailed transaction information that provides deeper insight into your financial position.
Budget and Transaction Integration
For budgeted items, the system shows you the actual transactions that have already been processed against that budget and calculates the outstanding balance. This balance is then used in your forecast calculations.
For example, if you had budgeted £5,800 for monthly sales and have already recorded £3,200 in actual transactions, the system would automatically include the remaining £2,600 in your forecast. This ensures your projections are always based on the most current information available.
The system maintains a clear connection between your budgets and actual performance. When viewing transaction details, you can see:
- Original budgeted amounts
- List of actual transactions posted against the budget
- Remaining budget amount to be included in forecasts
This integration helps you understand how actual business activities are tracking against your plans and how they affect your future cash position.
Real-time Forecast Updates
Through Auto Sync functionality, your forecast continuously reflects the latest transactions recorded in your accounting system. Additionally, any simulation changes you make to transaction timing or amounts are immediately incorporated into your projections, allowing you to see how different scenarios might affect your future cash position.
The system combines actual data, outstanding budget amounts, and simulated changes to provide a comprehensive view of your potential future cash position, enabling more informed decision-making for cash flow management.
Important: When a transaction that you've modified in your simulation is later updated in the accounting system (for example, date or amount changes), the subsequent Sync process will prioritize the accounting system data. Your simulation changes for that transaction will be removed and replaced with the updated information from the accounting system. This ensures your forecast always aligns with your actual financial data.
Best Practices and Tips
Effective Use of Simulations
Understanding when to use temporary versus permanent changes is crucial for efficient cash flow management. Temporary changes are ideal for quick scenario testing - when you want to explore different "what-if" situations without affecting your ongoing projections. These changes disappear when you log out, making them perfect for immediate decision support without long-term impact.
Permanent changes, saved through the Cash Projection, should be used when you're confident about modifications that need to be reflected in your ongoing forecast. These changes affect all CaFE functions and remain visible to all users. Keep in mind that saving permanent changes requires system recalculation, which may take some time to process.
Proactive Risk Management
Effective cash flow management requires regular monitoring and quick response to potential issues. The Cash Short Predictor provides various warning indicators and suggested actions to help you manage risks effectively.
Regular Monitoring Practices
- Check your cash flow forecast at least weekly
- Pay special attention to dates marked with risk indicators
- Review worst-case scenarios to understand potential impacts
- Monitor overdue payments and their effect on your cash position
Following System Guidance
The system provides specific suggested actions based on identified risks:
- Fund Transfer Recommendations: When one account shows a potential shortfall, the system may suggest transferring funds from accounts with excess balance
- Credit Line Adjustments: In cases where additional funding might be needed, the system may recommend exploring credit line increases
- Collection Priorities: When overdue payments are affecting your position, the system highlights which collections should be prioritized
Taking Proactive Action
When warnings appear:
- Review the Worst Case Scenario details to understand the specific transactions contributing to the risk
- Examine the suggested actions provided by the system
- Implement recommended solutions before issues become critical
- Follow up on overdue payments highlighted in the risk analysis
- Monitor the impact of your actions through the forecast updates
By following these practices and implementing suggested actions promptly, you can maintain better control over your cash flow and prevent potential shortfalls before they occur. The Cash Short Predictor is designed to be your early warning system - use its recommendations to guide your cash flow management decisions.
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