29 January 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 cashflow, 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 if too high
  • Gross profit margins if too low
  • Sales level if too low


Nexia New Zealand can help you to create your cashflow plan. Our experienced staff are also able to provide insight into the various ways you will be able to improve your cashflow. Don’t hesitate to get in touch.

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