Cashflow Management

A business will never “go broke” from having profit or too many sales!

We have found that most businesses “go broke” because they have poor cash flow management, in fact don’t have management accounts.

To define Cash flow is easy, you manage what money comes in and when it goes out.

There are very few business’ these days that don’t have an accounting software product on their computers, this means it’s simple to print out cash flow on a day to day basis then forecast when creditors need to be paid. These software products also offer many advantages such as job costing, inventory reports and spreadsheets for projecting the future needs.

All software products can provide monthly reports which will suffice. But if you run a smaller business, it is advisable to have a spreadsheet that compares the historical results with current results and should be used to make sure you have growth and that your projections are being achieved.

The cashflow spreadsheets will allow for weekly forecasts and provide you with the ability to deal with the “what-if” scenarios. All business owners using the spreadsheet can include an assumptions column that allow them to look at committing to a long-term agreement for growth. With the Abbott Adams model you can simply add the cashflow effects to the model to see their overall impact.

To many small business owners rely only on bank balances to determine what money they have, without considering what needs to be paid for now and in the future. Therefore, it’s impossible for them to determine outflows and inflows thereby causing constant cashflow stress and the lack of funds being available when needed.

The technology available today is custom designed to provide spreadsheets that allow for multiple bank accounts to be used when building reports and by providing cloud-based accounting, we can monitor what is happening. This gives you:

  • The ability to plan and meet your commitments well in
  • Plan your growth and expansion knowing the costs are within the spreadsheet and you can use the assumptions column to vary the money, move amounts and see what affect that will have on your goals.
  • Sustainability and predictability are your obligations to your family