Yes, we know that we’re always harping on about cash flow. And you may think about skipping this little piece of advice, but stop, wait, READ! Even at the best of times, the importance of cash flow cannot be underestimated. But at the moment it’s more critical than ever – retaining your bank’s much needed support could depend upon it.
Businesses love cash. Banks love cash. So why is it so often under the radar? Knowing how much cash you’ve got, how much is due to leave, and how much you’re due to get is critical. An effective cash-flow forecast, which is based on analysis of the key profit and financial drivers, can act as a guide for a business for 3 months or even 3 years. For a business armed with one of these, the sky’s the limit.
This is because a well informed cash flow forecast is able to do two things – both of which are essential to growth. Firstly, it will help you to make confident decisions and calculated risks in areas such as sales, pricing, efficiency and funding. Secondly, it will do the same thing for your bank.
Although this may sound simple – obvious even – there are many viable businesses which unfortunately come to a grinding halt because they haven’t paid enough attention to their cash flow. And in the current economic climate, with bank lending still restrictive, no business can afford to be in this situation.
A good quality cash-flow forecast which is regularly monitored against a business’s performance will help substantially with the company’s bankers and other stakeholders. It will present the company with a positive and professional image, something absolutely essential in today’s competitive environment.
Funding is out there, and banks are willing to lend – but only to those companies with the best prospects and the most professional management. To make sure you are one of them, get in touch with a member of our Business Advisory team on 01245 495588 or firstname.lastname@example.org for more information.