Do you have a good handle on your company's cash flow?

Anticipating cash flow can help with planning for business development

To truly develop a business, you need to put money and effort toward bolstering a variety of key areas. Such areas include product development, marketing, sales and more. These are the engines that power your organisation forward, and the more fuel you give them, the farther you'll go.

Without healthy cash flow, it's impossible to keep your company on an upward growth trajectory.

Of course, to invest in any of the above, you need funding. This doesn't just mean the promise that customers will spend their money and make purchases – it includes actually completing these transactions and physically having the cash in hand. Without a healthy cash flow, it's impossible to keep your company on an upward growth trajectory.

So why not put in the legwork to forecast that cash flow?

Preparing your cash flow forecast

True business development hinges upon having the cash flow to support it, so it makes sense that you should pay attention to your accounts and watch the money moving in and out. According to the Tasmanian Government, the smartest businesses know the importance of preparing cash flow forecasts and mapping out precisely when they plan to collect each dollar they're owed.

Once you have such a forecast in place, you can monitor your actual results when it comes to debt collection and compare them to your prior expectations. If you're coming up short, then you know it's time to make some tweaks to your business model.

Do you need to make improvements?

If you're monitoring your company's cash flow and you find that you're struggling to hit your goals, this might mean you need to change the way your company operates when it comes to billing and collecting money.

Do you need to make adjustments to your business plan?Do you need to make adjustments to your business plan?

For example, All Business noted that one common strategy in this regard is to change the terms by which you'll be paid. You could, say, give customers 15 days to pay instead of 30 once they're billed, or you could be more aggressive about demanding payments from debtors who are overdue. If it's unclear what tactics you need to pursue, it might be time to reach out for help from chartered accountants.

Find help reconciling your situation

If you're really unsure about the future of your business where cash flow is concerned, it might be time to ask for professional help from a business development consultant. Luckily, we have a team of them at Wilson Porter, and we're prepared to help you whip up all the budgets and forecasts you need.

This is just one of the wide range of business solutions we have to offer. To learn more about our repertoire, including everything from periodic management reports to long-term financial strategies, just get in touch.