{"id":1125,"date":"2020-09-10T16:29:11","date_gmt":"2020-09-10T06:29:11","guid":{"rendered":"https:\/\/markholton.com.au\/?p=1125"},"modified":"2021-02-02T11:13:32","modified_gmt":"2021-02-02T01:13:32","slug":"are-you-using-cash-flow-forecasting","status":"publish","type":"post","link":"https:\/\/markholton.com.au\/2020\/09\/10\/are-you-using-cash-flow-forecasting\/","title":{"rendered":"Are you using cash flow forecasting?"},"content":{"rendered":"\n<p>Cash flow problems are the reason that 82% of small businesses fail. One of the ways you can prevent your business from being one of them is by using a cash flow forecast.<\/p>\n\n\n\n<p>Small business owners are often faced with stressful financial decisions and periods of uncertainty. Having a cash flow forecast can help your business avoid cash shortages by allowing you to track whether your spending is on target, prepare for business expansion, plan for upcoming cash gaps and plan budgets. Here are some tips on cash flow forecasting to help your business be in control of its finances.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Prepare a sales forecast:<\/h2>\n\n\n\n<p>Existing businesses can look at past year\u2019s sales figures, taking note of busy and quiet periods, and prepare an income prediction based on historical trends.<\/p>\n\n\n\n<p>If you\u2019re a new business, you can start by making cash outflow estimates. This can help you plan for what sales you should aim for to cover this and make estimates of predicted sales.<\/p>\n\n\n\n<p>Knowing how much money you\u2019ll have in a week or a month is central to being able to budget and know when to pay your expenses. Whether you receive customer payments at the time of sale, or you receive payments based on a subscription or service, you can schedule expenses and budget based on payment periods.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Account for other income forms:<\/h2>\n\n\n\n<p>Your business may generate income from sources other than customers. Having an estimate of what income you\u2019ll receive and when allows you to refine<br>your budget and plan around payments. These income sources could include:<\/p>\n\n\n\n<ul><li>Grants (such as government grants).<\/li><li>Tax refunds and GST rebates.<\/li><li>Investments in the business.<\/li><li>Deposits.<\/li><li>Loans.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Estimate your expenses:<\/h2>\n\n\n\n<p>Your cash flow forecast should include all your predicted expenses, giving you a detailed outline of the amount you\u2019ll spend and when to help you determine a budgeting schedule and avoid cash shortages. Expenses to consider in your forecast include:<\/p>\n\n\n\n<ul><li>Bills such as electricity, water, rent, telephone and internet.<\/li><li>Staff wages, including taxes, superannuation or bonuses.<\/li><li>The cost of supplies and equipment.<\/li><li>Packaging and delivery services.<\/li><li>Software subscriptions, such as an office messaging system, accounting system, antivirus protection, website developing etc.<\/li><li>Maintenance and repairs.<\/li><li>Business loan or credit card repayments.<\/li><li>Staff events.<\/li><li>Buying new assets.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Update and refine your forecasts:<\/h2>\n\n\n\n<p>As your business grows and evolves, your financial situation may change. To keep your projections on track and as accurate as possible, update your cash flow forecast regularly to account for any miscalculations, unpredicted expenses or income and business changes. Taking a few moments every month or so will keep you prepared and prevent you from being caught off guard by a sudden cash flow crisis.<\/p>\n\n\n\n<p><em><a href=\"https:\/\/smithink.us20.list-manage.com\/subscribe?u=e808208b65230cfe7b2604095&amp;id=7e5ecb6e82\">Sign up<\/a> to receive Mark\u2019s monthly newsletters full of handy business tips.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cash flow problems are the reason that 82% of small businesses fail. One of the ways you can prevent your business from being one of them is by using a cash flow forecast. Small business owners are often faced with stressful financial decisions and periods of uncertainty. Having a cash flow forecast can help your&hellip;<\/p>\n","protected":false},"author":1114,"featured_media":1126,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[47,29,30,49],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Are you using cash flow forecasting? - Mark Holton<\/title>\n<meta name=\"description\" content=\"Cash flow problems are the reason that 82% of small businesses fail. 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