Everyone’s talking about cash flow forecasting and you know it’s important but how does cash flow forecasting actually help your business?  

Forecasting your cash flow pipeline allows you to navigate the future path of your cash flow. Forecasting allows you to map out what the financial position of the business will look like over the coming months. It can help you identify when you’ll need to take appropriate action to safeguard your cash position. 

Forecasting also allows you to scenario-plan, search for cost-savings, and look for strategies that will preserve your cash flow position. 

How to get more from your forecasting 

• Run regular forecasts – The financial landscape of your business will change on a daily basis. This is due to external factors and variables so it’s vital that you run frequent forecasts. This will allow you to react swiftly to any projected cash issues as they become apparent.  
• Use the latest cash flow forecasting apps – There are various cash flow forecasting apps that integrate with online accounting systems. These give you a more detailed view of how your cash inflows and outflows will look over the coming months. This is information that will inform and justify the decisions you make.  
• Explore the right revenue streams – Most sectors will have seen sales affected due to staff being away sick and other pandemic related restrictions. Now’s the time to explore other revenue streams, such as selling online, and new opportunities for income. The idea is to find ways to increase the money that’s coming in the door and balance out your unavoidable expenses.  
• Get proactive with cost-cutting – if you can reduce cash outflows to a minimum, that will have a real impact on the health of your future cash flow. Pare back your operations and aim to reduce things like unnecessary software subscriptions, or over-ordering of basic supplies. Negotiating cheaper rates with suppliers, if possible, will also help.  

• Review your staffing needs – assess your staffing needs to minimise the costs of staffing and resourcing. Consider changing working hours for some staff, redeploying staff in different roles, and work-from-home/hybrid options.  
• Run a variety of scenarios – changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Scenario-planning allows you to answer questions and will give you some hard evidence on which to base your decisions on. It’s a good tool to inform decision-making and strategic outlook over the coming months.  
• Look at various ways to access funding – if forecasts show a cash flow issue coming up, we can assist your business with this. We can investigate how to minimise expenses and what funding opportunities are available.  

Talk to us about setting up cash flow forecasting 

Forecasting is an important step to give you the business intelligence to support your decision making. 

Get in touch to improve your control over cash flow.