Scenario Analysis

In business, the best way to face uncertainty is to be prepared with the information needed to effectively respond to potential situations.

With PayPie cash flow forecasting software, you can create What If Scenario and plan for critical uncertainties that may affect your business’ cash flow in the future. You can leverage data to compare and make better-informed financial decisions to take your business to the next level. Sounds simple, right? The good news is, it can be!

What Are What-If Scenarios? 

What-if scenarios are created by modeling different hypothetical situations to see how these may affect your future cash flow.

What if you took on a business loan? What if you opened a new office? What if you hired more staff? With What-If Scenarios, you can evaluate different situations and predict their effect on your business’ goals and future cash flow.

The result is still dependent on your historical transactions, but with the additional variable of these hypothetical assumptions. Being able to build multiple scenarios allows you to predict whether the changes in the business decisions will be ideal or worst for your future cash position.

The perfect use of scenario analysis will mean you are fully prepared for any potential problem business can throw at you.

Protectively maintaining positive cash flow means having a tool at your disposal to provide an extremely accurate picture of your future cash position. This is where PayPie’s What-If Scenarios help you shine.

How Do PayPie’s What-If Scenarios Work?

What-If Scenarios can be a powerful resource that helps you define business’ critical uncertainties and create multiple scenarios to see their impacts on future cash position. Knowing what will happen to cash flow in different situations means you can make smarter decisions to prevent liquidity shortfalls

 

Creating a scenario in PayPie is super easy.   You can seamlessly create scenarios, add new data, edit old ones,  understand actual and projected cash flow , and more.

These are some of the key benefits you can get from simulating scenarios in PayPie:

Identify Your Critical Uncertainties

Economic conditions, illness, shifts in consumer behavior, and political policies are some of the many future uncertainties that may affect your company. To begin with, you need to analyze how these uncertainties will affect your cash inflows and outflows in the future.

Create a Range of What-If Scenario

Whether you are using our templates for planning for a loan, a projected income, an employee incentive, or a special discount, you are able to seamlessly develop multiple scenarios for the future with PayPie’s comprehensive planning framework.

Compare and Make Well-Informed Decisions

Finally, analyze and compare different cash flow scenarios to make important investment and strategic financial decisions. Our advanced cash flow management tool can interpret the likely financial impact of specific events with greater precision. You can share a cash flow forecast with your advisor, discuss the direction and improve the quality of organizational decision making.

Better Future Planning

Scenarios can be  a powerful tool that helps advisors and SMEs to get a glimpse of cash position and expected returns when planning for the future. Cash flow is one of the biggest challenges for small and medium-sized businesses and Scenario Analysis helps them keep strict track of their money using informed calculations

Estimate the Effects of Business Change

You can avoid potential losses and poor cash flow problems by analyzing the events and situations that may lead to negative results. Scenario Analysis can prove to be beneficial if you are looking to make changes to your business – launching new product lines, buying an office, leasing new equipment, taking on new staff, etc.

The Bottom Line – Why Should You  give PayPie a Try?     

  • It helps you create multiple scenarios for the future at the click of a button.
  • It allows you to see the impact of a scenario on your cash flow in real-time with simple and easy to understand calendar and chart.
  • It gives you the power to analyze and compare different cash flow scenarios at one place.
  • It helps you seamlessly estimate the money you expect to flow in and out.
  • It helps you make better financial decisions and plan for potential problems before they cause a crisis.

Signing up for PayPie is easy! Simply create your free account, connect your business and run your cash flow forecasts.

The information in this article is not financial advice and does not replace the expertise that comes from working with an accountant, bookkeeper or financial professional.

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