Cashflow Forecasting

Positive cashflow is the cornerstone of a successful small business – if you’ve got a solid understanding of what your money is doing, then you can concentrate on actually operating, and potentially expanding, your business.

Cashflow forecasting – mapping out where your money is coming in and where it is going out – is integral to giving an overview of how your business is performing. You can chart actual growth as well as identify, and plan for, future growth. It shows you how much money you make, how much you spend, and hopefully, how much is left over.

As a small business itself, Meticulously Managed Bookkeeping knows how important cashflow analysis is for your business. Using Xero’s integrated software, with all your financial data on hand, makes generating reports and managing cash flow easy.

The information provided in reports such as the one above can help to:

  • identify exactly where money is going out and where it is coming in
  • allow for forward planning so that you know what time of the year things may be slow, thereby putting money aside to cover that period if need be
  • identify which aspects of the business are not performing as well as they could be and need attention
  • identify which parts of the business are performing well, indicating possibilities for future growth in that particular area
  • maintain an awareness of some of the less regular costs to your business, preventing nasty surprises
  • provide handy and up to date information if you want to refinance, expand, or upgrade.

A couple of tips for improving your cashflow:

  • keep on top of your debtors – be aware of which customers have a tendency to be late or overdue with their payments
  • have an invoicing system set up that easily allows for follow up of overdue accounts
  • regularly review your invoices, making sure that credit terms and payment details on your invoices are correct and up to date.
  • if possible, put direct debit facilities in place for automatic drawdown of fixed fee contracts
  • provide as many avenues of payment as possible, credit card, EFT, paypal etc…
  • perhaps engage the services of a Debtor Management system to automate this process for you if you are time poor

Please get in touch with the team at MMBS if you would like to discuss the Cash Flow Analysis of your business!