A wise business owner once said, "Happiness is a positive cash flow." As a business owner, I'm sure you agree. Everything is better when your cash-in exceeds your cash-out.
A cash crisis can be emotionally devastating, and it can even kill your business. If you've ever had to beg, borrow and steal to cover tomorrow's payroll, you know what I mean.
The starting point for avoiding a cash crisis is having a dynamic forecast that you review on a regular basis. There are two forecasts that you will want to keep tabs on. One forecast to develop is the short-term forecast. This forecast is a 6-12 week rolling cash projection. The other forecast is the long-term forecast that helps you manage long-term cash projections (1-5 year). Both of these forecasts help you identify the necessary capital strategy to meet your business needs.
We have a booklet that discusses the role of dynamic forecasting in ensuring business growth. To learn more about cash flow best practices, cash planning, and much more, check out the booklet.
If you would like some assistance in preparing forecasts for your business, one of our Virtual CFOs can help you develop forecasts to prevent unexpected costs and better plan for the financial future of your business.