Cash is the lifeblood of any business and access to enough cash to meet needs is essential for survival.
Many businesses which are otherwise well run and have an excellent product or service unfortunately fail due to a cash shortfall or cash crunch. In some cases, this is difficult to avoid but in many cases, a clear plan, strategy, monitoring and measuring and good risk analysis can minimise the risk.
Cash flow forecasts, budgets and management accounts can help assess and identify likely positive increases in cash flow, which may signal the opportunity to strategically invest or expand but may also identify potential weaknesses such as how quickly vital new stocks are arriving after being ordered or how long it takes debtors to pay.
Ensuring that information is up-to-date is a very good habit to have for your business as is analysing the information and spotting trends or issues early, either positive or negative. For example, if your cash flow analysis shows that your customers are starting to pay more slowly, this could be an indicator and warning that they are struggling and that you need to tighten credit or perhaps that your industry or the economy generally are facing a difficult period ahead.
Key aspects of good cashflow and sales forecasting are :-
Most business will, at some point, need to seek finance from external sources, the most common route being bank loans or finance. When approaching a bank for a loan or overdraft your prospects are likely to be much better if the bank is reassured that you have good financial information and disciplines in place and that you use the information you have well.
Approaching a bank with no or poor cash flow forecasts, no or an inadequate budget and lack of planning and strategy may well raise a big “red flag” for that bank and result in significantly reduced chances of securing finance.
The same point applies if you are seeking to grow your business by attracting private equity or preparing for sale. Experienced investors will make judgments based on how you have been running the business and your financial projections and discipline.
Putting together management information is not just about running figures and creating impressive sales forecasts or nice looking charts, graphs and data. Thought, planning and strategic insights are important for good financial modelling.
A financial model for one type of business can vary hugely from another of a different type or in a different industry. Information is only useful if it provides actionable insights relevant to manage and plan for your business.
Good financial modelling can also mean the difference between impressing potential investors or a bank or other lending institution your business may seek finance from and being turned down.
We combine our traditional accounting skills and experience with the latest software to keep costs down. We then add the most important ingredient - our ears. By listening to you and understanding your business and what sort of reports, management information and data will be useful for you together with our commercial acumen we provide the right solution for you. Our team includes MBA Graduates.
If you are looking for help with financial modelling, please do call or email us, we'd love to assist.
Accurate forecasting is the key to financial peace of mind and our accounts team are very good at it.
We can help in setting up the right reports for your business, using the latest software for efficiency and costs savings. We also provide tailored yet affordable services to assist clients in understanding, forecasting and interpreting financial data whether from management accounts, cash flow or otherwise. In many cases we have provided clients with insights which help to minimise hidden risks, save costs or plan ahead to outperform expectations and competitors.
Talk to us about how we can help your business.
In addition to a BA (Honours) in Accounting, Sylwia also has a law degree, becoming legally qualified, deciding not to pursue career as a solicitor and instead reverted back to accounting.
Before opting for accountancy, Sylwia worked in various commercial roles, including sales for a prestigious business organisation, business development and high level client care/management skills at Gordon Ramsay’s head office, working as a VIP liaison.
Sylwia is a member of ACCA and joined Accounts and Legal in 2015. Her clients range from software development consultants to multinational wholesalers. Notably, Sylwia recently worked with a London gym and a new chain of supermarkets.
Outside of work she enjoys travelling more than anything else, having visited 5 continents in the last 2 years.