Cashflow Forecast vital for tracking finances

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Developing a cashflow forecast will help you see the impact of change on your business. If you are not doing a regular cashflow forecast, we recommend starting as soon as possible.

Forecasts are essential for all businesses to keep a good track of their finances and are especially important when times are difficult. All signs are pointing to the next twelve months being very challenging for the New Zealand economy and business in general.

The main benefit of a cashflow forecast is to identify whether your business is at risk of running out of cash. Identifying this early, allows you to put arrangements in place to identify the need for capital, extend banking facilities and work to meet creditor commitments, including those from the Inland Revenue Department.  

When you start to prepare your cashflow forecast, it’s important to ask yourself what’s behind any financial concerns you may have, and the implications associated with these. Are these short term or long term issues?

Start to look at areas where the business has seen growth and what may be holding you back, then think about where you want to take the company in the years to come.

When considering the future of the business, factor in any potential issues you may face when it comes to staffing, employment and the experience you have within your team.

Is there a need to review products or services that the business provides as some may be more or less profitable?

What are the businesses strengths and weaknesses in relation to the market and its competitors?

The preparation of a well-thought-out cashflow forecast will highlight key areas to be addressed in your business plan.

We can develop a forecast that will be unique to your situation, based on discussions with you about target setting and what you would like to achieve. This forecast can later be uploaded into your own accounting system and used as a tool for management purposes.

We can also help review any budgets and cashflows that you may have already prepared. Just give us a call on 03 379 1620.