With our new Forecast Confidence indicator you can now have greater certainty that the figures you're seeing in your cash flow are accurate.
The “OKAY” score in Float specifically compares the last 3 months of paid actuals to the next 6 months of forecasted values, providing an enhanced confidence metric for financial planning.
The score is calculated by looking at base budgets, unpaid invoices/bills and active/proposed projects over the next six months and is split into bands:
This involves comparing the past three months of paid actuals against the upcoming six months of forecasted values. Anomalies or trends in these periods can directly influence the score.
Overdue invoices or late-paid bills are a common factor in scoring discrepancies. Float considers these when measuring forecast reliability, which can lead to lower scores if not addressed.
Things that you can do to improve your score:
Make sure you have set budgets for everything that you are aware of, so Float can include these amounts in the calculation.
Add new dates for any Invoices or bills that show as overdue
Where possible fully reconcile your accounting software to ensure all actuals are up to date
Review historical data to ensure consistency between past trends and current forecasts to target variances early.
We factor in historical actuals, so if your future forecast looks vastly different from previous months, then you may see a lower score as a result.
However your score should update over time as future forecast months become reality.
Overdue or unpaid invoices contribute significantly to discrepancies. Ensuring timely updates to payment dates and resolving outstanding items can help align actuals and forecasts, subsequently improving the score.
If you are seeing a low score, yet are confident in your future forecast, then please do let us know. This helps us to see how we could improve the score in future.
NB - Currently, this works best for businesses with relatively consistent income and costs