Understanding cash flow is the key to running a successful business. Good cash flow management will help ensure your business runs smoothly and it gives you the insight to keep on top of your business’ financial health.

1. How much money will you be bringing in?

The first step in any cash flow forecast is to estimate how many sales you think you will be bringing in, either weekly or monthly. A great way to determine these estimates is to reference your previous sales history. Review the past couple of years and considering the past year’s performance at that time, try to get a good idea of what kind of weekly or monthly sales you can expect.

2. Consider the terms under which you will be paid.

If you’re an experienced business owner, you know that you don’t always receive the money you earn immediately. For many of your sales, you could be waiting 30+ days to see that cash. Therefore, it’s crucial when creating a cash flow forecast to estimate when you can expect payment from your sales.

3. How much money will you spend?

When creating your cash flow forecast, it’s crucial to be able to estimate how much your company spends. Of course, these costs are going to be both fixed and variable.

4. Put the numbers together.

To begin, add in an opening bank balance, then you simply add in whatever your revenue is (minus expenses) for whatever time periods you’re looking to forecast (weekly, monthly, and so on). Remember, the accuracy and effectiveness of these forecasts are going to depend on how often you forecast and how detailed you are in making projections.

How many times have you stayed awake at night, wondering if the cash you’re expecting will show up? And if it doesn’t, what will you do? Are you ready to get your business on the right path by monitoring your cash flow forecast?

It’s hard to deny that cash flow forecasting can be a challenging process. That’s why hiring a professional to help you is one of the best investments that you can make – it could even save you thousands of dollars each year.

Get the peace of mind you want and need – call us today to schedule your consultation so you won’t have to stay awake at night wondering how you’ll meet your expenses.


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