Are you worried about your business?

Now more than ever, it is important to monitor your business performance and set up forecasts. You may need to make some tough decisions in the months to come. You need to know on a week to week, or even day to day basis exactly where your business stands.

Cashflow Forecasting

Savings 2789112 640One particular area of analysis: cash flow forecasting is critical in determining whether a business will make it through, Monitoring your cash reserves and predicting the impact of economic changes gives you the tools to help make the right decisions at the right time.

With predicting the cash flow of a business, the process involves knowing what your current bank balance is, working out the various ins and outs of cash for each period and seeing what the cash balance will be at various points in the future.

Our Recommendations

1. Revisit your business budget in light of the current economic conditions.

2. Set up a number of scenarios to see what the likely impact is on your business and your bank balance in the future.

3. Work with excellent software like Calxa or Futurli to help you with creating different cash flow scenarios. Timing is important in difficult trading circumstances, and using software like these help you to get information instantly.

4. Examine your balance sheet to make sure it is a true reflection of your assets and liabilities – in particular look at the amounts owed by the business in BAS, payroll, leave provisions plus business loans. You should monitor that your business is trading solvently.

5. Look at your regular expenses and see if there are any savings to be garnered.

6. Keep a tight rein on your receivables and don’t let debts become too old. Clients may be scaling down or even closing, so make sure you have collected your monies owed as soon as possible

7. Work with your staff to come up with ideas to generate ideas and possible new revenue streams. You may need to make some tough calls with staff; if so, have discussions to see if there are reasonable agreements that can be come to in order to share the work hours, reduce work hours or use annual leave or long service leave for quiet times. (check with your HR specialist).

If you need help in reading your reports and analysing your figures, that is what we do. Or if you need more information on how to cash flow forecasting, we can help. Even just making sure that your numbers are correct, we can help. Give us a call for a free half an hour chat to give you some expert advice or use the form below.

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