Cash flow modelling – what’s it all about?

For us to be able to advise our clients correctly, we need to undertake some form of cash flow modelling, as this helps us to measure their net worth and current financial situation.

A cash flow model is a detailed picture of a clients’ assets, investments, debts, income and expenditure, which are projected forward, year by year, using assumed rates of growth, income, inflation, wage rises and interest rates. And by modelling a range of different ‘what if’ cash flow scenarios and outcomes, we help our clients to see, understand and believe the importance of planning their futures and gives them the ability to make the right choices and decisions when it comes to achieving their perfect work/lifestyle balance.

Essentially, cash flow modelling software enables us to run through the model live with a client allowing us to address any major concerns, including:

  • What they must do to achieve their financial objectives
  • How to plan to minimise their tax liabilities
  • A detailed analysis of how to achieve their personal expenditure – balancing cash in and out
  • How to avoid running out of money
  • How to plan the transfer of capital to other family members or charities
  • How long they will be able to support their lifestyle in retirement
  • How seemingly minor changes can dramatically change their financial future

Financial planning is a journey, not a destination

Being able to see it on screen gives clients all the reassurances they need and shows them what is possible, and how we can help them to achieve it. Plus by enabling us to create a personalised picture, cash flow modelling helps us to be very specific. Therefore, we can confidently advise clients about how much they will need to retire comfortably

Before cash flow modelling

After cash flow modelling


Cash flow planning is vital if a client wants to meet their financial goals. However the model is only as good as the inputted information, so it is critical that accurate figures are used. However, whilst cash flow modelling is a great software tool and good at helping us to start a meaningful conversation with a client, we never rely on it entirely. It is just one of the many financial planning processes that we use to ensure that we fully understand our clients’ needs and objectives for a prosperous financial future.

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