Using the liquidity forecast model
Using the liquidity forecast model
The liquidity forecast model in Power BI makes it possible to predict your future bank balance accurately from the data you already have. That gives you a complete picture of your financial position and lets you make well considered decisions.
What is the liquidity forecast model?
Our liquidity forecast model starts by pulling the organisation's current bank balance from your accounting software. It then calculates every payment moment from the open items, on both the purchase and the sales side. In calculating those moments it takes account of how quickly your customers pay and the payment terms of your suppliers, which even makes it possible to plan your own payment moments within the model.
All of this is imported automatically from your accounting software, so the manual work disappears. That saves a great deal of time and effort.
Besides the data from your accounting software, the model can be enriched with your own parameters through the linked Excel template. In Excel you can easily add subscription costs with their invoicing moments and payment terms, and fixed outgoings such as loan repayments, interest, bank charges, insurance, salaries and dividends. That lets you set the model up entirely to your own needs.
What can you expect?
The model gives you a detailed view of the bank balance over time, so you can estimate your future financial position accurately. It also has a drill down, which shows which income and which outgoings are behind each change in the balance. That lets you identify the causes of liquidity swings and act on them before they bite.
If this article, the video or the demo has made you curious about the model, or if you have questions, get in touch.
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