4 Steps to a Successful Business - Step 3 - Cashflow Planning

January 29, 2020


Once your business plan and budget are in place, you are ready to assess your cashflow needs by preparing a cashflow forecast. Cashflow planning and monitoring is a must for any business and is critical for survival and growth.   As discussed previously, the starting point is to ensure that you have a realistic budget.

The next step is to regularly monitor your actual cashflow against your budget, enabling you to prepare for upcoming cash outflows and respond to changes in your business quickly.

Our role as financial advisor, is to help you understand your cash flows, and identify issues that require corrective action. This is a continuous process in the management of your business, and allows you to make business decisions confidently.

Benefits of understanding cashflow

It allows you to monitor your actual cashflow against forecast cashflow from your accounting software. This provides peace of mind that your cashflow is within available funding arrangements.

It helps you understand the key cashflow drivers within your own business for better decision making. Cashflow planning enables you to predict and plan for large cash outflows and allows you to look in the right places to reduce costs.

It improves business processes that maximise cashflow, profit and business value allowing you to drive business to achieve your goals.

It identifies ways to avoid late payment penalties and interest charges from suppliers.

Areas of your business that can impact Cashflow

  • Accounts Receivable processes
  • Accounts Payable processes
  • Inventory processes
  • Debt/Capital structure
  • Drawings
  • Overheads too high
  • Gross profit margins too low
  • Sales level too low


Get in touch

Nexia New Zealand can assist you with creating your cashflow plan.  Our experienced staff are also able to provide insight into various ways you will be able to improve your cashflow. Click here to get in touch.

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