I’d an unexpected appointment with a stranger from New Zealand. I have never met nor heard of him. In fact, I only knew him after he shot me an email a few days back about wanting to show me something called ‘PocketSmith’. If he hadn’t hinted in his email that ‘PocketSmith’ is a financial application, I would have dismissed it as a Tamagotchi game device. And the website www.PocketSmith.com doesn’t actually have a direct sign-up feature. You need to get a ‘beta invite’ before you can actually find out what’s behind the fancy web designs. And what better ways than to meet up with the co-founder himself and get an official ‘beta invite’ from him.
And that’s how I ended up in Taipan’s Old Town that Friday afternoon. I was unusually punctual, arriving there 10 minutes before 3 pm. The PocketSmith co-founder arrived a few minutes later. He introduced himself as Jason Leong. Without further deliberation, Jason quickly get down to business and reveals his magic within his Macbook.
He began to show me one of the most powerful thing you can do with PocketSmith – forecasting your cashflow!
You start off the cash flow forecasting by indicating a starting balance (e.g. the balance from your bank account).
The next step is where the fun begins. You then populate the calendar with entries such as Petrol, Home Loan, Car Loan, Groceries, Salary and many other ‘Incomes’ and ‘Expenses’ items that you would normally have. You can set the frequency of an entry, either as a one-off, daily or a fortnightly one.
Here's how you can easily insert an entry into the Cash Flow Calendar.
After you’re done keying all the major items, PocketSmith will then recalculate the new figures you’ve just inserted into the calendar and will show you a forecast. Here’s an example of how the entries would look like in the calendar.
Expenses are labeled in red while Incomes are labeled in Green.
The resulting graph would look something like the following:
The graph forecasts the cash flow one year ahead from today.
The graph above shows a downward trend. Not a very pretty sight, but the important cue here is how the graph are forecasting your situation 12 months ahead from today and how you are warned about the downward trend way ahead beforehand. Notice there’s also a label ‘Actual’ on the graph above? This feature plots a graph that uses actual transaction datas from your bank statements. At this stage, you are required to upload the data manually. It would be great if there’s a way to connect directly to the banks.
Unfortunately, most bank statements in Malaysia do not offer usable file formats. My Standard Chartered account only allows for exporting to comma-separated values (CSV) format, and it can only retrieve transaction for the past 30 days. Well, I guess one of the more profitable channels for banks in Malaysia is extorting for money when you need to print a bank statement.
In this scenario, you are spending RM5,000 on your Bermuda vacation, and making sure that you have RM2,000 remaining in the bank.
A financial goal can be a vacation that you have been dreaming of or a Zegna suit that you’ve always been wanting to get your hands on. You can easily setup a goal using PocketSmith by specifying how much you would like to spend on that vacation, and how much remaining fund you would like to still have after coming back from the vacation.
The forecasting ability of PocketSmith allows you to keep yourself away from cash flow problems. You can make various adjustments to the spending habits or work hard on increasing your income levels to ensure that the graph is tilted upwards, or at least maintained at a fixed level.
Small businesses and young start-ups can also benefit a lot from PocketSmith’s forecasting wizardry. Spending too much, according to Paul Graham, is one way a start-up can kill itself. So, with PocketSmith helping you to extrapolate your company’s financial standing, you could make better hiring and spending decisions. Yes, there’s no longer excuse for young entrepreneurs to blame their dismay cash flow management on their lack of financial backgrounds. This tool is simple enough to use, even simpler than using a spreadsheet, and there’s no dull accounting jargons to make our life miserable.
A photo taken with Jason Leong, PocketSmith.com's co-founder
Besides developing PocketSmith, Jason also does a great deal of work organizing efforts to support entrepreneurs. With only 3 people in the team, they’ve demonstrated how you don’t have to be large conglomerate to deliver remarkable results. Jason runs PocketSmith from Dunedin, New Zealand and is currently expanding his cash flow wizardry in other countries, including his homeland Malaysia.
If you would like to give PocketSmith a try, just drop me an email!
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