Budgets and cash flow forecasting might sound a bit too much like ‘accountant speak’ but they are important tools all businesses should use.
Most businesses will be used to setting certain targets for the coming year, maybe something like the sales figures you’d like to achieve or possibly taking on another member of staff or launching a new product. What often gets overlooked are financial targets, or budgets. It’s important to set budgets and then to monitor things as the year progresses to ensure everything is on track for you to achieve your other goals.
It’s surprisingly easy for a business to fail even when they have a full order book and the reason is often down to a lack of cash. If the business can’t afford to buy the parts needed to fulfil the orders or employ the staff to make the products then, however many orders they have, the company will fail. A cash flow forecast would help predict this dilemma before it happens and therefore allow remedies such as short term funding to be considered.
Budgeting and cash flow forecasting help you measure how successful your business is throughout the year and will often help you avoid many potential problems before it’s too late. As part of our support for our clients we will help them forecast for the coming year but also interpret figures throughout the year and advise on the best action to take.
Please get in touch and see how we can help you.