Cash Flow Forecasting - Cash is King

This is part 3 of our 6 steps to Cash Flow Methods.

Cash flow forecasting is the art of actually putting down on paper, or in a spreadsheet, what you think you are going to get in this day, week, month, quarter, or year, and what you will pay out of those funds. It is a difficult task if you have not done it before. It takes some time to review what you have spent, and what you think you will spend. Spending is secondary to what you are going to get in.

Do you know what your sales will be this month? Do you know if you have any large bills coming due? Do you need more or updated equipment to run your business? Is it getting time for Spring cleaning?

Without an adequate Cash Flow Forecast, you could find yourself with overdrafts, deficiencies, late payments and problems with your vendors. If you have taken out any loans to run your business, you will need to add them to your forecast so you can make the scheduled payments and keep your credit intact.

You need to be thinking short term and long term regarding your finances. The short term keeps you abreast of what is happening now, but the long term can show you where you will need to either get more sales, or move payments around. You are being proactive when examining this kind of detail.

When do you have time to do a Cash Flow Forecast? Once you get one in a spreadsheet, you can do a weekly cash flow listing and then put in the actual figures that occurred. This will help you see if you are running into a problem, before the problem hits.

RCM does cash flow forecasting for you. We can get you set up, so you can just enter in figures that you feel are correct. Then as the weeks go by, you will get a clearer picture of your business needs. Sign up for our free report, and we will send you a weekly tip sheet to keep you clear about what you need.

A Penny Saved is Power.