Successful Cashflow Forecasting and Budgeting

November 8, 2017

Raising funds or refinancing? Then it is highly likely that a budget or cash flow forecast will be required to support an application for funding to ensure its success. These forecasts are used in the application process to give the financier comfort that the applicant can meet its repayment obligations.


Nexia New Zealand recently assisted Shopping Centre Investments Limited (The Hub Hornby shopping mall) with their successful $72.5million refinancing and $13.781million Convertible Notes issue. In a tough climate, the Convertible Notes issue had a fantastic response and was filled within three weeks of the offer opening. As part of the refinancing and construction of the Product Disclosure Statement (PDS), robust detailed budgets, cash flow projections and projected Financial Statements were prepared. These reports were forecast out over the next five years. To ensure that these reports were vigorously constructed, we worked closely with the company’s Board of Directors, property managers and its bank manager to identify the purpose, key inputs, and the covenants that had to be met.


Whilst cash flow forecasts and budgets are common for financing purposes, they are not the only reason they should be prepared. It is recommended that businesses prepare annual budgets for the organisation work to, and projects that are being funded from cash flow. Regular reviews will allow for the budget to be amended throughout the year to account for changing events affecting the business. If the accounting system allows, loading a budget into the system to compare against the monthly actuals provides a great tool to identify which areas are meeting expectations, and what areas need to be focussed on.


If you are looking at completing budget or cash flow projection for your business or a project that is being explored, then contact your adviser at Nexia New Zealand to discuss.   


For more information, contact:

Andrew Kidd

Nexia New Zealand

T: +64 3 379 0829


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