Can Xero do a cash flow forecast?
Yes. Xero has a built-in short-term cash flow projection that looks at your outstanding invoices (money owed to you) and upcoming bills (money you owe) to forecast your bank balance over the next 30 days. It updates automatically as new invoices and bills come in, so the forecast reflects your actual position.
For anything beyond 30 days, Xero’s native forecast is limited. That’s where add-on forecasting tools come in. We connect Xero to apps like Float, Futrli, or Spotlight Reporting to build longer-range cash flow forecasts – 3 months, 6 months, even 12 months ahead. These tools pull your Xero data and let you model different scenarios: what happens to cash flow if you lose a client, take on staff, or delay a big purchase.
How do I do a cash flow forecast?
A basic cash flow forecast follows three steps:
- Start with your current bank balance – This is your opening cash position. Xero shows this in real-time from your bank feed.
- Add expected cash in – Include outstanding invoices (when you expect customers to actually pay, not just the due date), recurring revenue, and any other income. Your Xero invoice data gives you a solid starting point.
- Subtract expected cash out – Bills, rent, payroll, VAT, loan repayments, and any one-off costs. Pull these from your Xero bills, recurring transactions, and upcoming commitments.
The result is a projection of your future cash position for each week or month. If the forecast shows a negative balance in month three, you know now – not when the bank bounces a payment.
You can build a basic cash flow forecast in a spreadsheet. But a spreadsheet goes stale the moment you save it. A cash flow forecast connected to Xero updates itself as invoices are paid, bills come in, and bank transactions clear. That’s why we recommend connecting your forecast to your Xero account rather than maintaining a separate file.
Does Xero have a cash flow report?
Xero offers two built-in cash flow reports:
- Cash Summary – A report showing cash received and cash spent for any date range, broken down by category. This is a backward-looking cash flow statement – useful for understanding where your money went, but not a forecast of where it’s going.
- Short-term Cash Flow – A forward-looking projection based on invoices and bills in Xero. Shows your expected bank balance for the next 7 or 30 days. This is Xero’s built-in cash flow forecast tool.
For a full cash flow statement (the kind your accountant or bank might ask for), Xero generates this as part of its standard reporting suite. It shows operating, investing, and financing cash flows using the indirect method. We help clients read these reports and use them for decision-making.
What is the best cash flow forecasting software?
For Xero users in the UK, these are the forecasting tools we recommend:
- Float – Syncs with Xero daily. Best for businesses that want a clear visual of their future cash position without complex setup. Starts from 49/month. Good for owner-managed businesses and SMEs.
- Futrli – More advanced scenario modelling. Build multiple forecast versions and compare them. Useful if you’re planning a big investment or growth phase. From 45/month.
- Spotlight Reporting – Three-way forecasting: profit and loss, balance sheet, and cash flow all linked together. Used by accountants who need to present forecasts to boards or lenders. Pricing on request.
- Fathom – Primarily a management reporting tool, but includes cash flow forecasting features. Good if you already use Fathom for KPI dashboards.
Which one suits you depends on your business size, what you need the forecast for, and how hands-on you want to be. As your Xero advisor, we’ll set up the tool, connect it to your data, and show you how to read the forecast.
Why cash flow forecasting matters
Profitable businesses go bust because of cash flow, not because of bad products. You can have a full order book and still run out of cash if your customers pay in 60 days but your rent is due on the first of the month. A cash flow forecast helps you spot these gaps before they become crises.
Cash flow forecasting is also essential when:
- Applying for a business loan (lenders want to see a cash flow projection)
- Deciding whether to hire, invest in equipment, or take on new premises
- Managing seasonal businesses where income fluctuates
- Planning for VAT and corporation tax payments so they don’t catch you short
How we help with cash flow forecasting
- Review your Xero data – We check your bank feeds, invoice terms, bill schedules, and recurring transactions are all correct. Bad data in means a bad forecast out.
- Choose the right tool – Depending on your needs, we recommend and set up the forecasting app that fits your business.
- Build your first forecast – We create a cash flow forecast using your Xero data as the baseline, adjusted for known future cash commitments.
- Monthly review – We walk you through the forecast each month, flag any cash flow risks, and update assumptions as your business changes.
What does it cost?
Our cash flow forecasting service starts from 100/month as part of our management reporting package. The forecasting software is a separate subscription (Float from 49/month, Futrli from 45/month). Xero UK pricing for the accounting software itself starts at 15/month. We’ll quote a fixed monthly fee that covers everything.
Get started
Call us on 0161 832 4451 or book a free consultation. We’ll review your Xero setup, show you what a cash flow forecast would look like for your business, and give you a clear quote. Your free cash flow view starts with a conversation.
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