Xero, Forecasting & Looking To The Future

A few weeks ago at Xerocon Brisbane, cloud accounting pioneer Xero announced it would launch its own baked in forecasting tool. It’s not THAT surprising a move - Xero and competitor Quickbooks have done similar with receipts, practice management and Tax so, to me, this always felt like a matter of time. 

Obviously, I started my FinTech journey with forecasting tool Futrli. So it’s a space that remains close to my heart. Also, to be honest, this kind of work is also pretty key to my (not so new now) world at Capitalise. After all, a good forecast can throw out a host of funding needs.  

But Xero launching something in a space they helped grow and nurture initially made me worry a bit. What if this is going to muscle out some of the more established brands? 

Interviewed for AccountingWeb, Fluidly founder Caroline Plumb stated “Cashflow developers are always flattered when an incumbent recognises the importance of a category you’ve been building…” and equally upbeat was Colin Hewitt from Float “Cashflow has been undervalued and represented historically… Xero acknowledging this and adding it to their core platform is a positive move.”

Was this just PR speak by the two founders of the apps that are most likely to be impacted by this latest announcement or is this really good news for the category as a whole? 

After a few weeks to think it through, I do believe this is good news. Forecasting is still seen as a pretty niche area, especially for SME’s. Yup, it’s core to the advisory journey that accountants are on and, for sure, more now than ever they are seeing the benefit forecasting can add to their clients. But getting clients to see that isn’t always as easy.  

My oldest friend runs a car repair body shop in Worthing (Repair Smart - look them up they are really good). He’s run it for years and has always been highly successful. But does he forecast either short or long term on a regular basis? Maybe when they were expanding, for the purpose of funding, but day to day, week to week… nope.  

And, I’d guess this is typical of many, if not most, SME’s.   

So in the same way that Cloud accounting wasn't really a thing until Xero came along in the UK, I genuinely think having a basic forecasting tool built into Xero will start driving conversations around what a business SHOULD and COULD do. It will be on the agenda, something you can train clients in and something that will have the full marketing budget of Xero behind it. 

In the same way that some SME’s will do their own accounting and others will rely fully on their accountants, so some SME”s will do their own forecasting. And this may see so work lost. BUT I honestly believe that more want support for when Xero’s Cash Flow tools stop and this is where a Float, Fluidly or Futrli (and no doubt many others) will pick it up, backed up once again but an accountant who can do it quicker & in more detail.  

Still not convinced? Well both Xero and Quickbooks offer built in Receipt scanning software and yet Receipt Bank still remain one of the largest FinTech’s in this space, as well as other equally great products from AutoEntry and others. 

I’m forecasting a bright future for this category… (sorry I couldn’t resist!) 

Read the original news story here: 

https://www.accountingweb.co.uk/tech/accounting-software/xero-eyes-cashflow-forecasting