Is it necessary to forecast cash flow? Cash flow is the lifeblood of your business. When it comes to cash flow management, preventing cash issues from happening is far easier than trying to solve them after the event.

If you can control the positive cash flow coming in from balancing your income (the cash inflows) against your expenditure (the cash outflows), your business will always have the liquid cash needed to cover your liabilities.

Forecasting your cash inflows and outflows

Forecasting works by taking your cash data from prior periods and projecting it forward. This gives you a ‘crystal ball’ that reveals the future health of your cash flow.

By running detailed cash flow forecasts, it’s possible to:

• Understand your future operational cash flow. Helping you to see the seasonal dips or the projected drops in income, and get the early warning you need to take action.
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• Plan your costs and expenditure effectively. By working to strict budgets, looking at cost management and reining in expenses – so your future outflows are reduced.
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• Avoid the cash flow issues before they happen. Giving you the information you need to plan, take clear action and stay in tight control of your cash status.
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If you want to get a grip on cash flow, we’ll help you tailor your accounting set-up. We can also provide the cash flow forecasting tools you need to reveal your future cash position. Get in touch and let’s start forecasting.