Management accounts and cash  flow forecasting

Cash flow

forecasts

Cash is absolutely key to the success of any business and a lack of cash is the single biggest reason that businesses fail – a profit may be generated at the end of the year, but it is the peaks and troughs of cashflow throughout that year that, if not properly managed, can cause your business to struggle or even go under.

Marshall & Co can assist with preparing a cashflow forecast for your business which will help you to effectively plan in advance for times when you might need to arrange finance in the form of loans or overdrafts. Banks are far more likely to accommodate your needs if they are anticipated and monitored in a controlled and responsible way. Regular cash flow forecasts provide sound evidence to any prospective lender that a business is being well run – there is nothing wrong with seeking out financial assistance, most businesses will need some help, especially in the early years, it isn’t a sign of weakness, rather an indication of sound management.

Manage financial performance

Managing a business or organisation is far from straightforward. When running your own business, not only you must make daily decisions where you are judged on the outcome, but your personal financial position can be inextricably and immediately impacted.

Thus, preparing regular management accounts provides you with the key information that you need to make informed decisions, monitor financial performance and monitor key performance indicators.

• Prepare management accounts at a frequency that matches your needs - monthly, quarterly or bi-annually

• Agree the key performance indicators that you would like to be monitored (e.g. the average amount time your customers are taking to pay you)

• Explain the key messages shown by information, helping you to understand what you need to know (e.g. falling gross profit margins or an increase in the time your customers are taking to pay you)

• Provide regular estimates of business and personal tax to help manage your future cash flow



• Provide management information and guidance to support you in obtaining finance for your business, improving your credibility with lenders