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Budgeting and cashflow forecasting play an important role in business performance management. A good budget allows you to set financial targets and measure your performance, and cashflow management enables you to predict how much money will be available to your business at certain points in time.
Once you have a business plan in place, it is important to create a meaningful budget. A budget is a financial plan against which to compare the actual results throughout the year. It is prepared in conjunction with the actions identified in the overall business plan.
The purpose of a cashflow forecast is to enable the business owner to identify the cash needs of the business in advance. Understanding your cashflow allows your business to service debt, fund growth, and withstand economic downturns.
A large number of businesses that ultimately fail have underestimated the consequences of poor cashflow management.
Nexia’s experienced team can guide you through the complete budgeting and forecasting process.