Why we built Futrli Predict and where it sits with Futrli Advisor

Where we’ve come from

It’s been 6 years since we launched Futrli Advisor at Xerocon in Sydney, and a lot of learning has happened.

Advisor is an award-winning product for a reason. It's perfect for the management reporting, board packs, KPI creation, dashboards, and longer-term strategic cash flow forecasting, planning, and modeling that larger or more complex small businesses demand from their accountants. And, it’s supporting in excess of 60k businesses so far in gaining funding, expansion, operations, investor relations, and board reporting.

Predict is not this.

It's a new approach to forecasting for business owners who need and want a different experience. Predict is the next generation of financial prediction software.

It is the only hybrid cash flow forecasting app in the cloud ecosystems that combines outstanding invoices/bills with historical profit and loss and balance sheet performance, to give a complete and accurate picture of short, medium, and long term performance, as well as cash flow, which is essential in today’s Covid-19, impacted world.

It’s a “Sat Nav “ and early warning system if you will, which takes the complexity out of the forecasting experience, guiding businesses on their day to day decisions,  we hope,  between meetings with their advisor, as well as forming the basis of those discussions when they are had, with little or no effort required from either party.

The accounting firm dilemma

Over the past 6 years, our accounting customer feedback has told us that it is not financially viable for firms to provide traditionally thought of "Advisory": long-term strategic planning, KPI reporting, and board packs, for 100% of their client base.

In fact, we have seen that the norm in most firms is that the forecasting capacity element alone is reached at between 10-20% of a firm’s total portfolio due to compliance commitments. Even when there are exceptions, the ceiling we found was 60%.

Which means that between 90- 40% of all small businesses are at risk of having no visibility over their financial future?

This is something that has to change. Having founded Futrli after having cash flow issues, when I didn't project VAT accurately to the cost of £40k in my pub back in the day (nearly losing it, and experiencing the stress, worry, and sheer fear that that brought). There had to be an alternative route for the vast swathe of business owners and managers that can't be serviced in the manner they need, through no fault of the accounting firms that look after them.

The business owner dilemma

We also did significant research with small businesses directly, which uncovered a user experience issue with dashboards and PDF reporting as vehicles for day-to-day decision making.

The presentation of both was often felt to be overwhelming (even though many that we interviewed didn’t tell their accountant they felt like this), and in the main, both vehicles were used to deliver a historical view of their business, so in the bid to make the best decision with what was presented, they didn't see the immediate value.

The majority also confirmed that they had never been offered a forecast by their accountant, except in the case of a funding need, when one would be prepared solely for that purpose. This confirms the accounting firm stats above.

The paradox came when they detailed that they absolutely wanted to know how their business was going to perform, but relied on gut instinct or their own spreadsheets to make their decisions. Their worries were if they could make payroll, if there were things they didn't know about that might bite them in the future; what future trends there could be in the business;  if they should keep staff on; if they should launch a new service; if they could afford their tax bills etc. They often also wanted to know that their shorter-term cash flow outlook was secure.

The forecasting software dilemma

This short-term day-to-day view is not found in Futrli Advisor. It doesn't create a short-term cash forecast using direct forecasting methodology (based upon due dates of invoices and bills), such as you'd find in Float if you are familiar with that app. It uses the indirect method, which projects from the historical P&L and Balance Sheet.

And, solutions such as Float give a cash flow only view of a business. No business can be run from gross cash flow movements alone as they are often wildly different from the actual net operational activity from sales for instance. I wouldn’t say my monthly revenue was the cash I’d received, it would be the total of sales within the month ex VAT or GST.

The solution

Factoring every one of these dilemmas together, we found a perfect storm of problems to solve.

This new solution would only be possible if we:

• Invested heavily in researching the user experience needed by this cohort of business owners.
• Transformed the complexity, uniqueness, and often irregularity of a small business's data into an experience that was simple, elegant, and easy to use day-to-day.
• Created projections using every type of transaction from the P&L and Balance sheet (invoices, bills, journals, spend/receive money e.g.) to ensure operational trends, seasonality, and even Covid-19 effects were detected automatically.
• Combined these projections with the impact of due invoices and bills to ensure the short term was also predicted accurately.
• Aggregated payment behaviors, so that those due dates weren't relied upon, but actual payment history overall transactions were calculated daily, to ensure cash flow was accurately represented.
• Calculated future VAT/ GST accurately from actual and predicted data so that they didn't experience my experience all those years ago.
• Ensured that the entire continued experience would flex and move with their business by automating all of the above based upon new data so that there is accuracy, as well as little or no effort on the business their part or yours, or the solution, would not scale within firms within that large SME cohort.
• Explain where predictions come from so trust is established.

Predict is this.

It’s not going to solve this pandemic, but it will help protect businesses and families, helping them not just to get through it but to thrive and grow.

It’s just the start of this next-generation wave of prediction software that we will be bringing to you. What we are setting out to do is very ambitious and it will take us well into 2021 to achieve it all, but we also want to get it right for you and your unique business.

Hannah Dawson

Founder & CEO, Futrli

How does this work as a small business owner?

Connect Xero or QuickBooks account and you’re on your way. The aim is that you log in to it at least weekly to check you’re on track as your business evolves every day. It may flag trends you didn’t realize, or alert you to things that you should take action on today. Nirvana is logging in and getting reassurance that everything is ticking along nicely. Test decisions before you make them by creating your own predictions too and you and Predict we hope will become a team. (We hope you’ll invite your accountant too!)

How does this work in an accounting firm?

Just as Facebook owns Instagram and both do similar things, but deliver different user experiences for different audiences, Advisor + Predict work together in a firm and deliver a very different user experience for very different needs. Predict should be prescribed to those businesses described above who need the Sat Nav to guide, inform and reroute them when necessary: protecting them between meetings with you.

By using both products with the right audience you have a solution to ensure that every type of small business within a typical portfolio has access to understand their financial future, with a user experience that reflects their need, which is even more important in today's Covid-19 ravaged world.

Predict walk-through.

Predict accounting launch (UK)

If you’re a business owner and your accountant hasn’t prescribed Predict for you yet, or you’re an accountant and want to use this with your clients register here - no credit card needed and 7 days trial.

(if you’re already a Futrli Flow user just log in and add Predict in the settings cog at the top)