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Cashflow Forecasting Is Not An Option - It's A Must!

Simple rules for successful Cashflow Forecasting:

  • Start it right now, don't wait or it may be too late.
  • Be honest with what cash you expect to come in, when and how much.  Don't add speculative figures, e.g. tender values for new contracts that you've not yet won as this will just confuse the reality of your forecast.
  • Keep at it - don't do it once and then put it away for 3 months.  Cashflow Forecasting is the heartbeat of your business and needs monitoring at ALL times.
  • Forecast as far ahead as you possibly can.
  • Finally - use it - make it the central point for all key decisions that have a financial implication, e.g. if you want to spend/invest a reasonable sum of money in something (new staff/office move/IT equipment etc..) - well go to your Cashflow Forecast and see if you can fund it through your Cashflow.   

Three formats to use:

  • Monthly forecasting if your cash position is healthy and does not fluctuate a great deal mid-month;
  • Weekly forecasting if your cash is a little tighter and can vary from week to week;
  • Daily forecasting if your cash is very tight and could easily breach your banking arrangements (e.g. your overdraft limit).

Once you have your Cashflow Forecast up and running you'll then start to see potential issues coming towards you, like a gap in funding needed to pay key bills, as opposed to just crashing into them leaving no time to fix. 

So don't delay, start Cashflow Forecasting today.  


Alan J McCafferty
Founder & Chief Executive
Simply Cashflow - Providers of Cashflow Forecasting Business Management Tools
www.simplycashflow.com

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