Cash flow planning
Cash is king
Our team help to look at the highs and lows of your business and the future income and outgoings to ensure your business can keep running. Cash flow forecasting is an important and often overlooked part of business management. Speak with our team to discuss your business needs.
Cash flow was one of the biggest causes of small businesses failures in Australia during 2015.
Cash flow is the life blood of any business but many business owners don’t realise that they are in a cash flow crisis until it’s too late. Its very easy to feel that your business is successful and be carried away with the day to day work. But with poor cash flow planning and strategy it’s also easy to fall into the cashflow trap. It’s important to get as much expert advice as you can. There are two ways to get into a cash flow crisis, growing or slowing your business.
In fast growing or seasonal businesses (retail or service) increasing sales mean that you need higher stock levels or more work in progress which you may need to fund before getting paid by your customers.
In a slowing business, cost-cutting measures such as smaller premises and reducing employee numbers won’t be enough to ride out a cash flow crisis. Your previous expenses and fees involved in exiting contracts may impact your cash position for a significant time.
To avoid a cash flow crisis we work with you to look at a number of factors, for example:
(1) Producing a cash flow forecast
(2) Get the right financial structure
(3) Review loans and banking
(4) Review costs and cash-draining initiatives
(5) Debtor collection procedures
(6) Stock control
(7) Pricing reviews
At Leenane Templeton we help with cash flow and business strategies and work with you to grow your business. Call any of our team today to book an appointment.
Commonly Asked Questions
1. Can I manage my cash flow simply by monitoring my bank balance?
No, anticipating future cash flow is important to ensure that you do not miss the implications of an impending cash flow deficit before it is too late.
2. As long as I am making a profit, won’t my cash flow take care of itself?
No, profits are not cash. Revenues and expenses determine profit, whereas cash receipts and cash disbursements determine cash flow. A profitable business can run out of cash by ‘over-trading.’
3. Do I need to have a cash flow budget?
Yes, a controlled cash flow, the end result of cash flow budgeting, will more than repay the time and effort you give to it by ensuring that you can pay your bills when they are due.
4. Will the bank ask me for a cash flow budget when I apply for a business loan?
Yes, because it tells the bank how much money you need to borrow, when it will be needed and when it will be repaid.