Cash Flow Budgets and Forecasting

We encourage our clients to do this on a regular basis especially for those clients who have recently purchased an existing business or as part of a Business Plan for a new venture. Regular updating is required because you can be guaranteed not everything will go to plan so having a rolling forward budget or forecast with cash flow the key. 

Most businesses raise their funding from a variety of sources, typically - a mix of the owner`s personal funds, loans from family and friends and of course the bank. 

It is important to ensure the money you have to start your business is the right money, in other words you do not want to borrow excessively when you have plenty of your own money or sell to individuals who invest their own money into new businesses who will then want a percentage of ownership - commonly known as venture capitalists. 

The simplistic explanation of cash flow is the money flowing in and out of your business and one of the first things to understand is that profits generally do not automatically equal cash, understanding the operating cycle of your business is critical - trading terms with sales and purchases are often different so whilst you may be trading profitably on paper your cash flow says otherwise.