Cashflow Forecasting & Management
Cash oils the wheels of your business. It’s the liquid that keeps everything moving. If it dries up, your business will come to a grinding halt. Nasty surprises are the last thing you need with your cash so a short-term weekly cashflow forecast is an essential tool for every business. So how do you forecast your cashflow?
Keep it Simple
A spreadsheet is an ideal tool for cashflow forecasting because it can easily be customised to suit your requirements. It provides visibility as each week progresses. It can be as simple or as sophisticated as your business requires. You need a section for receipts, one for payments and a balance showing available cash each week. It is helpful to have a summary supported by separate sheets containing the details for each part of the business. Weekly forecasting is suitable for most situations although monitoring cash on a daily basis may be more appropriate if cash is very tight. You should forecast at least 3 months into the future so that you always have your next VAT payment in view.
Managing Cashflow
Having built your cashflow forecast you’ll need to allocate time to keeping it up to date and regularly reviewing it. If you identify cash shortages in the future you should use the forecast to assess what action to take. Firstly, do everything you can to secure your cash collections on time. Secondly you can move payments dates in the forecast to model different options to improve the cash balance but you must ensure you have agreed this with your suppliers. You might choose to delegate the updating of the cashflow forecast to another member of your team but it is vital that you keep a close eye on it.
Take Action
If your business already has a cashflow forecast in place then it’s important it is up to date and used to plan ahead. If you don’t use a cashflow forecast then there has never been a better time to start. Create one for your business today.
Questions to Consider
- Is my cashflow forecast accurate and up-to-date?
- How often do I review my cashflow forecast?
- What options do I have if cash gets tight?
Free Business Review
Since all businesses are different and may have varying financial requirements, it makes sense for one of our experts to get to know your company in greater detail so we can create the perfect package for you. To do this, we provide a free business review or site visit, enabling us to obtain all the relevant information we need to improve and manage the financial side of your operations. Contact us today to start the conversation.
What Our Customers Have To Say
Over the years we have helped hundreds of businesses take control of their finances. By working closely with owners and directors we become an integral part of the management team and as a result have long-standing relationships with our customers, many of whom have relied on our expert knowledge, advice and guidance for many years. Why not review some of our case studies or watch the one-minute video below to hear what our customers have to say?
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