Cashflow management

22 December 2020

One of the key drivers in any business should be the owner’s understanding of the Company’s cashflow.

Running out of cash could be terminal for the business or planning for growth may need cashflow management, forecasts and monitoring.

Sometimes your bank will ask for a Cashflow Forecast for financial and risk management reasons. Rightly so, as a loan is a risk and assessing your financial position on a regular basis is important because your cash may be also be at risk. It therefore makes sense to have every piece of information that you can gather for better decision making in your business.

Inadequate cashflow is usually a symptom of management problems in a business, not the cause.

Who should get a review?

As a business owner, it’s one of the major tools to facilitate good information gathering. Of course we can produce a document for financial institutions, however the main thrust of cashflow planning is for your benefit. This service will highlight the difference between profit and cash, and the impact improving your Cash Conversion Cycle will have on your business which is essential to growing and managing any business.

What is involved?

There are two support options to choose from. They both include the preparation of a Cashflow statement and aligning this with your forecasting or accounting software.

Level 1: Cashflow Forecast. Includes the preparation of a cashflow forecast and a one hour review to discuss the outcomes and general pointers.

Level 2: Cashflow Management Coaching. Preparation of your Cashflow Forecast with the added bonus of three valuable hours of coaching where we will:

  • Discuss and finalise the Cashflow Forecast
  • Identify likely causes of any cashflow issues and how to improve them
  • Identify your current Cash Conversion Cycle
  • Importantly, help you set 12 month and 90 day cashflow improvement goals and actions

This initial level 2 session will be followed by four quarterly accountability coaching sessions which will ensure that you achieve your agreed cashflow improvement goals and management strategies.

When should I get a review?

Any time is preferable to not having this key information readily to hand. However, we recommend that every business owner has this in place before the start of their business’ financial year.

The best possible time is now, so that we can work together to agree strategies for improvement.

Benefits of Cashflow Management

  • Enables better business decision making by improved understanding of cash and liquidity
  • Helps you understand the Cash Conversion Cycle in your business and key cashflow drivers
  • Enables you to plan for large cash movements
  • Enables you to effectively monitor your actual cashflow against forecasts
  • Provides peace of mind that your cashflow needs are known and properly funded
  • Improves business processes that maximise cashflow, profit and business value
  • Drives your business to achieve your goals in a controlled and managed way
  • Assists with financial lending requirements
  • Identifies potential late payments issues for proactive management to reduce penalties
  • Improves relationships with your financial contacts and suppliers

For a complimentary Discovery Call to discuss the most appropriate level of support on a wider basis, a personalised quote and a guarantee of our best possible service, please complete the form below and one of our senior advisors will contact you.

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