Whilst tireless Christmas shoppers feverishly flood the shopfloors and online stores, we see the stressed look on business owners’ faces as, year after year, they brace for the unpredictable cash highs and lows of the season. That’s why we’re writing a special feature to inspire and enlighten business owners about the benefits of proper cash flow planning to get you through to the New Year… and beyond.
Thinking about how your own business will manage through this period, remember that your financial budget is the money map of the journey your business takes, with your cash flow plan being equivalent to a fuel gauge telling you how much cash is at hand. This is important, as not only low profit businesses need to carefully monitor cash. The risk of running out of ‘fuel’ can be highlighted by an up-to-date cash flow plan.
Cash is the scarce resource that restricts the development of any business. Having a picture of future cash flow is key for all business owners. It helps understand scenarios like how fast you can go, how much you need to sell, and when you might be able to hire your next employee. Understanding historical trends helps you forecast cash flow.
Once you have a forecast you can plan for what the future brings. Not only that, the business decisions you make will be better. This sort of project is ideal to work on with your accountant. In fact, many of OBT’s savvy business clients are doing just that right now in preparation for 2013.
Creating a cash flow forecast is one of the ways we’re seeing business owners build a much appreciated relationship with us. Often it’s the starting point for other projects as it gives both parties an idea of how fast your business can run.
Imagine what great shape your business could be in at 30 June 2013 having planned the route map now!
If preparing a cash flow forecast for your business during FY13 is hampered by time restraints, disinterest or lack of know-how, contact OBT to get the process underway. We can work closely with you to build a forecast tailored specifically for your business, taking into account seasonality and other issues that affect your business.