Is cash flow one of your biggest issues? Do you have sleepless nights worrying whether you have enough funds to pay suppliers? To make payroll? This weeks podcast guest has a powerful tool  that will help you. Colin Hewitt founded Float, the cash flow forecasting app. He lives in Edinburgh, Scotland but was originally from Belfast, Northern Ireland.


Why was Float created?
Colin Hewitt was caught up in the excitement of the web. He started an agency doing digital work like building sites and eventually his focus turned to finances. It’s something you must be very aware of. Making a payroll becomes front and centre.

Float - Cashflow forecasting made easy with Colin Hewitt.

He didn’t want to be so worried about finances so he decided he needed a better solution. A more automated solution. Initially it was via a spreadsheet. He started using cloud accounting. He realised he could extract data from the accounting software and via an API direct the data into his spreadsheets.

Then he attended a conference in the States, along with people like Mark Zuckerberg and other exciting entrepreneurs. This prompted him to get out of agency work and into product work.
How does a design guy come to build a financial app?
He was always operating at the intersection between design and technology. He was non-financial. After university, he needed to get out of student overdraft and student loans. He built a personal spreadsheet to get himself out of debt. He built a spreadsheet. It told him that if he spent £100 less than he earned in 12 months he’d clear his overdraft. He graphed it and this visualisation made all the difference to him.

He took this graph idea into his business.

Kevin’s experience from the business health check suggest 9 out of 10 businesses worry about cash.

His system works like IFTTT, IF THIS THEN THAT. You authorise your accounting platform to allow float to access your data. Once you have given permission, Float have a token which allows Float to request data from the software, like:

Bank transactions
Open Invoices
Journals

Float builds a set of accounts back into a cash basis. This provides the user a really nice cash based forecast.

There is no need to re-key data into a spreadsheet. As soon as you leave the spreadsheet, a new invoice coming in changes it immediately.

Colin recommends Receipt Bank or Shoeboxed to capture receipts in a timely way so the accounting system is up to date. He then transfers this data from the accounting system (Xero, Quickbooks online, or Free Agent) into Float using the automated API.
Float has a big development programme
Colin has worked on the Float solution for 5 or 6 years. It is very nuanced. It is not likely to be subsumed by the accountancy solution provider like Xero.

Cash flow forecasting is a more niche, targeted area. Float is just focused on developing more and more features and application uses for Float users.

He is going deeper into understanding what customers want. Customers are busy, so the product must be easy for people to pick up quickly and use.

For more complex modelling and sophisticated forecasts, patterns, growth trajectory, he’s still in the foothills. A lot of leg-work is still required for these issues.

40-50% of his clients are professional services. The pipeline looks rosy for 4-5 months then after then the forecast falls off a cliff. So, the focus turns to chasing monies you are owed.

Xero has just hit 1,000,000 customers. When they started with Xero, they had 20,000 customers. It still feels like the market is very early. Plus, it is an international business.

Xero is a New Zealand business. There has been a lot of innovation from the southern hemisphere. Most companies are using cloud software, whereas businesses in US are still turning cheques.
Why does Float help a small business?
There is appoint in any small business where you can keep a handle on finances. A few invoices,

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