A Cashflow Forecast is one of the most helpful financial tools for a business.
Our clients use them to help:
Plan their spending; and
Feel less anxious about whether they will run out of money.
At Franchise Accounting & Tax, we can help you manage cashflow in your business. Why not ask us to put together a forecast and help you use it. Contact us to get started.
What is a cashflow forecast?
A cashflow forecast sets out when your business will receive income from sales and when bills need to be paid. It can be prepared on a weekly or monthly basis. At Franchise Accounting & Tax, we like a 3 month forecast.
The cashflow forecast is a glimpse into the future of your business. For instance, it shows precisely when you might struggle to pay bills. You can then take steps to address the problem.
And because you’ve looked ahead you can address the problem before it becomes a crisis!
Do you need a cashflow forecast?
We have found there are 3 common situations when clients find a cashflow forecast helpful:
1. You want to increase revenue.
Your business needs to spend money to make money. To increase sales you will almost always need to spend more on advertising and marketing, hire additional workers, buy new equipment, invest in technology, and take additional business advice.
These additional costs mean that outgoings increase before you bank the money from extra sales.
So, how much money do you need to cover these extra costs? A cashflow forecast will help you know.
2. You are constantly running out of money.
If you are always juggling money to pay bills the first step is to lay out the timing of the money into and out of your business. That’s what a cashflow forecast does.
Once you can see the patterns of money flow it’s much easier to work out how to reduce the juggling!
3. You’re feeling anxious about money.
A cashflow forecast can help you feel less anxious about money. Whether you’re just starting out in business or are well established, anxiety can be a thing. And it’s tricky to focus on the job of business when you’re worried about money.
At Franchise Accounting & Tax, we can help you manage cashflow in your business. Why not ask us to put together a forecast and help you use it. Contact us to get started.