4 Tips for Accurate Cash Flow Forecasting

I‘m always on the lookout for articles with the potential to positively change a business. What’s your take on the following points I came across recently? 

Cash flow forecasting is, hands down, one of the most important things your business should be doing. In short, its how your company can predict your annual profits vs. your end-of-year debt. It also allows you to get a clear glimpse of where you are making the most and see who you owe money. It will help you set your financial goals for the next year. So how do you go about setting up your cash flow forecasting?

Here are 4 tips on how to do so (and make it as accurate as can be).

1. How Much Money Will You Be Bringing In?

The first step in any cash flow forecast is to estimate how many sales you think you will be bringing in either weekly or monthly. A great way to come up with these estimates is to reference your previous sales history. Look at the past couple of years and try to get a good idea of, considering the past year’s performance at that time, what kind of weekly or monthly sales you expect to see. Obviously your sales won’t always be consistent, so take into consideration patterns that are the same each year (seasons and holidays, for example) and factors that could change each year, such as trade shows or promotions, when making your projections. It’s very important that you think in length about your future plans. Any new marketing efforts you make or products you bring into the mix should allow you to increase your sales forecasts. On the other end, if, for example, you know of a new competitor entering the market, you might want drop your figures a bit as they may gain a bit of your market share.

I’d be really interested to know your opinion. Check out the full article here <https://www.allbusiness.com/cash-flow-forecasting-8143-1.html> and then I’d be happy to discuss with you by phone (0429) 011-071 or email ? [email protected]

All the best!

Ian