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How’s Your Financial Forecast?

Published by Jamie Nau on 03 Jan 2018

Most small businesses have an accountant or bookkeeper on staff that can look at the company’s past performance to forecast what your next month, quarter, of sometimes the year will be like. The big question is, “Is that enough?” Or, should you be thinking in terms of a daily or weekly detailed forecast?

Don’t hold your business back. It’s time to start building a stronger financial foundation. You need to know things like your cash flow, the kind of investments you need to make, and distributions you should take. Some small businesses may hire a family member or bookkeeper to handle their finances. But after you have at least 10 employees, it’s time to hire an experienced CPA to help you with your cash flow and forecasting on a regular monthly basis.graph_explaination_single_PA_3152.gif

As your company grows and you begin to employ even more people you might consider hiring a part-time CFO to help with your cash flow and forecasting on a weekly basis. This will help to protect the company’s financial health.

When forecasting, your focus should not only be on past balance sheets, but how it will affect your future balance sheet. Therefore, if you’re looking for a true forecast, you will need to take into account your revenue and expenses as well as other elements, such as:

  • Future liquid cash.
  • Long and short term debt pay off.
  • Customers that owe you money (accounts receivable) and their payment terms.
  • Vendors that you owe money (accounts payable) and what your payment terms.
  • Capital purchases needed in the future.
  • Your upcoming expenses such as; travel and marketing.
  • Cash to pay your quarterly taxes.

When you forecast your balance sheets it helps you make timely adjustments and develop a better understanding of your business. At the end of the day, what actually matters is the financial health of your business. If you need assistance with your company forecast, contact our office at (866) 497-9761 to schedule an appointment with our advisors.

                                                          WE SPECIALIZE IN CASHFLOW MANAGEMENT

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