How do I forecast my businesses cash flow?
Have you ever wondered if you'll have enough cash to make this week's payroll or to pay your tax remittances? By regularly forecasting your business's cash flow, you'll know and will be able to plan according.
If you haven't already mapped out your cash flow, the first step is to determine how you stand today. Create a complete list of all payables (amounts owed by your company) that you have today and predict to have in the next three months. Now do the same with receivables (amounts owed to your company). Remember, knowing the amounts is only half of the equation. To perform a proper forecast, you need to map out when these amounts will be received or need to be paid. Using your knowledge of the payment terms you've given your customers or negotiated with your vendors; enter the receivables and payables in the appropriate week or month on your spreadsheet.
Mapping out your cash flow will give you a quick visual of times when you can expect to have cash shortages or overages. Armed with this knowledge, you can manage money and resources to better grow and maintain your business.
If you need help calculating your cash flow, don't be afraid to ask for help from a professional. Accutrac Capital offers cash flow tools and resources such as accounts receivable factoring to help our clients keep their cash flow strong and healthy.