1. Cash flow forecasting – The forecast is used to forecast and record the cash inflows and outflows of your business. This cash flow forecast provides information on whether your business will have enough cash to run or to grow.
2. Managing working capital – this involves managing suppliers, debt collection and inventory control so that the business cash outflows are well timed against cash inflows.
TR Consulting has assisted many clients with building their cash flow forecasts. Whether you are a start-up, a small business or a medium to large business estimating cash outflows and cash inflows is crucial to the survival of your business.
TR Consulting begins with firstly identifying your business’s source of cash inflows. We then identify all projected cash outflows and expenses, including ‘one-off’ expenses.This detail is used to build the cashflow forecast, which is all about timing and flow of cash. Cash inflows are deducted from the cash out flows for each period (month), leaving the closing cash balance, which becomes the opening cash balance for the next month. This helps you understand your business’s cash position on a monthly basis.
Once the cash flow forecast has been built, the crucial step is tracking the estimated cash flows against ‘actual’ cash flows. TR Consulting has helped many businesses in Australia with their reporting to perform the cash flow analysis they need. This has helped drive key decisions and improve the timing of cash flow and understand any warning signs to help avoid financial trouble in the future.