Simply put cash is the life blood of any business. Every business either invests or spends money to make money, without it you cannot survive. With credit and loans and other forms of funding, businesses have access to cash in various forms, not just shareholder funds.

Having access to cash is a good start but having it at the precise time you need it is critical, otherwise you may not have cash to pay whatever is due on that date. Managing and forecasting cashflows becomes just as important as a getting predictable revenues or managing expenses.

What is a cashflow forecast?

Basically, it is a projection of when cash comes in from your customers versus cash being paid to suppliers plus cash on hand and access to credit facilities. Typically, an Income statements measures income versus expenses when an invoice is created or obligation created but due to credit granted to customer and by supplier the timing of cash flows is delayed and needs to be carefully planned for. This is usually done as a monthly forecast but sometimes it is necessary to do it daily or weekly as cash cycles may vary within the month. Month end is usually a key time for severe cashflow focus, as this is when most activity occurs in certain industries

How can we help you? (www.pathfinderssa.co.za)

Pathfinders is exceptionally qualified to advise Business Owners and Managers alike! Alongside our business advisory services and mentorship services, we dive deep and focus on all aspects of your business strategy and performance, which creates the magical winning formula for success.

 

Contact us via info@pathfinderssa.co.za or via our website www.pathfinderssa.co.za to find out more.