17 Jan Cash Flow Forecasting as a Tool for Planning for the Future
With load-shedding as a crucial challenge facing many small businesses, worrying about having money to cover business expenses is inevitable. Cash flow management should be a key priority, especially when you have bills to pay while waiting to be paid too. Mastering cash flow management is vital as a form of risk management to help you prepare for unpredictable circumstances. Here is how you can use cash flow forecasting as a tool for planning for the future.
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Cash flow forecasting
Cash flow management is used to estimate cash that is coming in and out of your business over a given time. This helps you run your business more efficiently and get a sense of trends around slow and busy months.
Knowing your cash position empowers business leaders to make more informed decisions. Especially decisions around when to buy new equipment, hire more staff, or perhaps if you may need to use credit to get through a slow period. It enables you to get a clear view of whether your business is doing better or worse than expected.
Using Cloud Financial Management software like Sage Intacct, you can create estimates for an entire year and even shorter periods. Monthly or weekly.
Using cash flow management as a tool for decision-making
You can compile comparative figures. Drawing you a view of the same period in the previous year and the current year and understand where the shortfalls may be. They say lightning doesn’t strike twice in the same place, but the same doesn’t apply to sales. Your previous sales can give you a view of what to expect to make in a given month.
There are many benefits to cash flow forecasting. Drop us a line at 011 792 9521 or contact us via email, and one of our experts would be glad to guide you on how you can use cash flow forecasting as a tool for planning for the future.