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Weekly Business Question – Week 5: Is your cashflow causing you sleepless nights?


As all owners of small and medium sized business are only too painfully aware, the movement of money in and out of your business is important, and needs to be managed appropriately.

Do you understand how to develop and manage a cashflow forecast?

Money is the oxygen that keeps your business alive, and is seen as the primary indicator of business health.

Put simply, cashflow is the journey money takes through your business. From the income derived from sales, loans and interest on savings, to the costs of running your business like buying stock, paying wages and rent.

The headaches with cashflow occur because outgoings usually occur way before payments for your goods and services are received.

A business needs to maintain a working capital, a pot of money that is available to cover the period between money being paid out and receiving payment.

Without this fallback your business is at risk. What happens if you have to make an unforeseen one off payment, or a major customer doesn’t pay on time?

Planning ahead, with the aid of a cashflow forecast, enables your business to predict the financial crunch points. Businesses that plan ahead are able to predict times of cashflow hardship and ensure they have sufficient capital to cover these hard times.

Do you know how to predict your cashflow for the coming year? Could you benefit from help to plan your business income and running costs to better forecast for the future? Drop us a line, we might be able to help you get a good nights sleep by freeing up your cashflow. Please complete the Free Health Check form and we shall be in touch.

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