Business cash flow, forecasts & budgets

What is business forecasting?

You started your business for a reason and you have something valuable to offer. But before you know it, your finances and the numbers start taking up the majority of your time, your passion is put on hold, and you feel like your business is under-performing (or worse!). 

Using business forecasting gives you control of your financial future by using historical data and trends to show you scenarios of what will happen in the future. Forecasting means you will be no longer using plain guesswork to make decisions. You can forecast your cashflow, your goals and KPIs, profit, sales, demand and better prepare for all the bumps in the road. 

We can work with you to build live and accurate predications (from your own accounting data and industry insights) that will keep you on track and ready to face anything. 

• Explain the importance of business forecasting

  Much like tuning into the weather forecast each morning to prepare and alter your plans for the day, business forecasting does the same thing but for the future of your business. Having a forecast in place gives you the ability to plan for the future and any “bad weather” that may pop up. “Bad weather” could mean getting a handle on seasonal ups and downs like Christmas busy rush, or a mammoth shake up like COVID-19 lockdowns. 

  With business forecasting, you can set your goals and plan for both short term and long term futures - having all the information at hand when something bad happens and you need to re-plot the path.

Forecasting your business cash flow

Cash flow is one of the biggest areas of concern for small business. You have faith your business can grow and succeed, but you’ve got concerns about whether you will have the cash flow to get you there. But it doesn’t have to be that way. Cash flow forecasting can use your historical data (sales, expenses, payments, liabilities, etc) and paint a fairly accurate picture of the next 1, 3, 6 or 12 + months of business ins and outs and cashflow. While it won’t ever be 100% accurate (something always pops up!), it’s 100% better than no idea at all. Having a cashflow forecast means when that one thing does pop up, you can add it right in and see what impact it will make down the road. 

The best part is there’s no intense spreadsheets or double entry of data required. Using software and machine learning, all of this can be integrated and interconnected with every area of your business.

• How a cash flow forecast can help a business

  With 56% of small business owners facing cash flow pressure over half of all businesses worried about how they’re going to pay their bills (Xero, 2022.), having an idea of your cash flow will save many sleepless nights. 

  A properly set up cash flow forecast is your roadmap to telling you if you have enough cash to run the business, or expand it. It will tell you if you will be unable to make payroll the same month as your large insurance payment, for example, or when exactly you will feel the pinch of not making enough sales last month. Having this knowledge in hand will save so much stress, and allow you to feel empowered when it comes to making decisions. 

• Can new businesses / start ups do cash flow forecasting?

  Businesses who are new and just starting out will have a bit of a harder time in trying to assemble their cash flow forecasting. Without any historical data (trade, sales, expenses, etc) to build on, we will need to put in a little extra work in estimating your sales and expenses to create a conservative best guess and continue to revisit with real numbers once every couple of months.

Business budgets are a game changer

A business budget is an essential tool for business because it’s your planned income and spending for any period of time. You can never truly know the financial health of your business without a plan of the comings and goings. We know the term “budget” sounds painful and boring, but in honesty they can be quite empowering! Having one in place gives you the background will give you:

• An insight to eliminate wasteful spending and gain more profitability
• Give you a solid idea of the sales you need to cover the costs of your set period
• Determine how much money remains to be reinvested into the business
• Determine if and when you can afford to hire help

Budgeting effectively keeps the business and all departments on track . We can work with you to create budgets with our simple and intuitive software (that’s right - NO EXCEL spreadsheets) to help you stay on track and compare to your actuals with a click of a button.