Managing cash flow is one of the most important and everyday challenges for businesses. Businesses are dynamic, and so too should be your cash flow forecasting. Seasonality, unexpected events, tighter revenue streams and general business overheads all affect forecasting.

As cash flows are not static, neither is our solution! We work closely with our clients to truly understand their businesses and cash flow realities, to create a tailored cash flow that helps drive your business towards its profit targets and manage cash effectively.

Through a dynamic cash flow forecasting model, we can predict the impacts of potential future events on your businesses and advise on mitigation strategies, like cash injections, when it’s needed most.

It also seeks to see where your cash flow can be freed up and how those additional funds can be put to work to further drive towards the ambitions of your business.

When the word ‘Budget’ is mentioned in business, the first thought that usually comes to mind is “profit and loss budget”, and it’s true it is a vital measuring tool and the base for determining whether a business can survive. However, a profit and loss budget is only part of the forecasting story because it won’t tell you when and how the profit and loss affect your cash balance. It usually won’t include the timing of payments and receipts. It typically won’t include principal loan repayments, dividends and taxes (income and GST). As a result, a very profitable business can run out of cash!

At Tribel Accountants, we are great believers in Three-Way budgeting, often preferred by advisors and financiers.

A Three-Way Budget is consists of projections for:

1. Profit and Loss;
2. Balance Sheet; and
3. Cash Flow.

All three budgets should reconcile with each other, and being balanced should see projections being much more accurate and reliable.

Once we meet with you, we will model these projections based on your current Key Performance Indicators (e.g. Gross Profit percentages, Debtor and Creditor Days, Inventory Turnover, Wages to Revenue etc.). Then, we can provide you with strategies to improve these and positively impact the balance of cash flow – the lifeblood of any business!

We can tweak the various KPIs to set targets that help you reach your goals by starting with the end in mind. Even better, profitable and good cash flow businesses usually lead to increased sales values of firms when the time comes to sell.

We can meet with you monthly or quarterly to act as an independent sounding board, which means we can help you interpret any differences arising from comparing actual and forecast results and make recommendations for keeping your business on track.