Cashflow forecasting services

• Comprehensive expenditure analysis
• A focus on payment terms, not invoice dates
• Keeping predictions realistic
• Forecasting for various scenarios
• Comparing your forecast to actual results

The best forecasts are comprehensive and realistic.

Not at all! The best forecasts are simple and flexible, and they therefore come in all shapes and sizes.

The key is on focusing the forecast to your business as this allows you to channel in on what is important to you and what actionable changes you need to make to achieve your financial goals. 

Your budget is your planned revenue and spending. It allows you to plan for the future and review your excess spending. Consider preparing a budget monthly, quarterly, or annually.

Cashflow forecasts are typically more frequent, often monthly, and focus on the cash ins and outs for your business. A cashflow forecast predicts future trends and gives a realistic idea of when your business is going to require a cash injection to avoid problems. 

Both budgeting and cashflow forecasting are important forecasting tools for business. They can help you keep on top of your bills and can also prove useful if you are trying to get finance (it shows lenders you can pay them back). 

Put simply, a well thought out forecast can:

• Provide you with visibility on how your business is performing
• Give you the tools to make sound, thought out business decisions
• Ensure you don’t commit to spending money that you won’t have
• Ensure you don’t take unnecessary, expensive, short term finance when cash may be freed up in the near future
• Help shed light on bad spending habits
• Identify areas for growth and improvement
• Help you to achieve your goals

Forecasting is tricky for start-ups - you rarely have an existing model to work from. Do your due diligence by researching industry benchmarks for salaries, rent and marketing costs.

Ask your network what you can expect to pay for professional fees, benefits, and equipment. Set aside a portion of your forecast for advisors – that’s accountants, solicitors, that kind of thing. 

Since you do not have any historic financial data to review, make sure to use projected costs. For example, if you have signed a lease for office space, use the monthly rent you will pay moving forward. 

There are numerous pieces of software which are able to perform increasingly complex cashflow forecasts. The best ones will feed directly to and from your existing bookkeeping software (Xero, QuickBooks etc.) to help improve the accuracy of your predictions.

We work closely and regularly with many software providers so please speak with us if you would like any advice on where to get started.