In less time than you spend on your daily coffee break, you can confidently forecast and manage your cash flow so that you can reduce your risk and chart a path for growing your company.
Monthly Merits of Forecasting Your Cash Flow
If you are not already doing so, make sure you assess your cash flow on at least a monthly basis. This will allow you to understand how much money is coming in, what’s being paid out, and when to expect these inflows and outflows of cash. Timing of payments is absolutely critical information to have if your cash reserves are thin.Careful tracking of your cash flow can give you time to react to situations that arise before they become problematic.However, there are other benefits to building out monthly cash flow projections. Tracking this cornerstone of your finances is critical for understanding your overall financial picture and plotting a path to growth.Although revenue growth and profit margin is essential for long-term success and growth, irregular cash flow can stop your growth in it's tracks and put your business at risk.
When your business has highly variable cash flow you can certainly benefit from a more regular forecasting assessment. Understanding when to factor in large purchases, scheduling regular, recurring payments or deciding invoice dates can be key to planning.Managing your finances can feel a little like juggling at times, but keeping on top of it is essential for maintaining control and creating stability in your business.In times of crisis, it may be important to track your cash flow on a nearly daily basis. Missing key payments can be more than a headache for your business, it could spell the end of it.
Long Range Planning & Goals Review
In addition to your regular forecasting schedule, it's important to determine where your business goals lie and how you can achieve them. Producing regular cash flow statements to share with partners, investors or your accountant, allow multiple people in an organization to have a clear picture of where you're headed as well as determining if targets were met during the previous term.Depending on your individual circumstances and the amount of variance in your accounts receivables and payables, it’s a good idea to set up a forecasting schedule to manage your cash flow and minimize your risk.
Dryrun is a simple way to forecast your cash flow, build budgets and track sales projections.