Cash flow forecasting and management is an essential part of effective financial performance. If you’re looking to work in a finance role, you need to have a clear understanding of the importance of cash flow and how it works. Patricia Barlow, a Qualified Accountant & Accounts Tutor at Babington Group, is holding a webinar on the 22nd July at 2pm, covering the following points:
- Why cash flow is the lifeblood of a business
- How to create a cash flow forecast, using Excel or other spreadsheet software
- How to manage a cash flow effectively, keeping it up to date, and planning for eventualities
- How to identify problems such as limited cash flow, and devise solutions such as managing resources better and negotiating with suppliers
The importance of cash flow
Cash flow is the essence of an organisation. Without it, a business cannot pay its bills, suppliers and employees, which will result in insolvency. Effective cash flow forecasting and management is all about ensuring you balance outgoing and incoming funds in a way that makes cash required available at the right times.
Creating a cash flow forecast
You need to create and update your cash flow forecast using software that allows you to organise and sort the data properly. Microsoft Excel is a popular choice, as it allows you to use formulas that automatically update totals, so that you’ve always got an accurate overview of your cash flow status.
Managing cash flow
Effective cash flow management involves planning far in advance, so that you can predict future outcomes. This involves looking at sales forecasts, impending bills, employee salaries, and other factors that impact cash flow, and using them to anticipate the financial state of the business in the coming months. It is important to keep your cash flow forecast up-to-date, so that you always have the latest picture.
Along the way, you are likely to face obstacles such as limited cash flow, that require prudent solutions that make the cash required available again as soon as possible. Effective solutions often include better resource management, and diplomatic negotiation with suppliers.
Sign up to webinar on the 22 July to help guide you through the cash flow forecasting and management process. If you can’t attend this date, you can request to be sent a video recording of the webinar.