Project Description

Cashflow Forecasting is a Must 

Do you find you have cash shortages at certain times during the month? For example around payroll or bill payment time at month end? Do you use a cashflow forecast model?  Even a simple spreadsheet can help project where you may have extra cash or have a cashflow problem before it arises.

Why Forecast Your Business Cashflow?

There is nothing more frustrating or embarrassing than not having any cash when you need it. Cashflow Forecasting is one of the hardest things for non accountants or business owners to keep tabs on. Recently we have had several businesses ask us about cashflow forecasting. How to do it? Easily? And we are not talking about a monthly cashflow forecast summary but a daily real life working daily cashflow forecast that helps the business owners really pin point where and when they will run out of cash and make them find a solution now! Big corporates use daily cashflow forecasting tools in fact most have large teams of people who do this all day everyday in those big businesses. This is one of the reasons why they became large businesses. You should do this too.

The Problem With Weekly And Monthly Cashflow Forecasts

Most businesses who have an inhouse accountant use a weekly or monthly cashflow forecasting model. The problem with these models is that they tend not to show the intra-week or intra-month balances and whilst the ending balance might be ok your cash balance might exceed your available cash limit on any given day during that week or month. These weekly or monthly models don’t highlight any given day during that period where you might run out of cash. You might start day one with $5,000 in the bank, have to spend $6,000 on day two and receive $10,000 on day three. For a weekly or monthly model this may not show up as a problem, when in reality it is. Our free daily cashflow model would show this as the problem it is in advance and make you aware that you need to find some cash or delay the spend.

One Benefit Of Daily Cashflow Forecasting

One of the good things we have found is daily cashflow forecasting highlights when you may have extra cash that you can transfer to your high interest savings account for a week or so. Most savings accounts calculate interest on a daily basis so even a day or two in a savings account can be worth a surprising amount.

How to Forecast Your Cashflow

Start with your Accounts Receivable, Accounts Payable Reports and a list of your regular Direct Debits. This information forms the basis of your cashflow forecast. Who you are going to pay, who’s going to pay you and when your rent and car payments come out. From there it is relatively simple task to keep the forecast up to date on a regular basis. We include detailed instructions with our free daily cashflow model to ensure you can accurately track your bank balance everyday.

We have compiled an easy to use free cashflow forecast spreadsheet template that forecasts everyday where your cash is or isn’t. It is a simple model that can be used by anyone who is familiar with MS Excel.  Please email us on request a free copy today.

Back to Top
Enter your Infotext or Widgets here...