January 20, 2016

Budgeting & cashflow forecasting

Do any of the following methods of managing your business’ cashflow ring a bell to you?

  • You manage your business by gut feel.
  • You manage your business’s cashflow by monitoring the bank balance daily.
  • You prepare an annual budget and promptly file it in the bottom draw never to be seen again.

You prepare an annual budget and compare the actual result and cash position to the budget.

We have found that the percentage of business owners who manage their business’ cash flow via one of the above methods to be frighteningly high.

If you are one of them, you are selling yourself and your business’ performance short.

Proper budgeting and cash flow forecasting is a major step in the successful management of your business and involves much more than simply preparing a quick budget that you never really use in the future.


We take a detailed, wholistic approach to the budgeting and cashflow forecasting process where we:

  • Determine the key drivers of your business, which enables us to develop accurate and meaningful sales/income figures;
  • Review and discuss profit margins, including the use of industry benchmarking, so that realistic and achievable profit figures are budgeted;
  • Review and discuss the key cash flow indicators including debtor days, creditor days and inventory days, comparing them to industry benchmarks, so that realistic and achievable cash flow figures are budgeted;
  • Review and discuss your plans for the future to ensure that otherwise forgotten issues such as growth funding or new/replacement equipment etc are budgeted for;
  • Develop an “action plan” so that you know exactly what to focus on in order to ensure that the business reaches or surpasses budget; and
  • Schedule regular follow up meetings and/or phone calls to review both the planned actions and financial results and make adjustments as required.


To arrange a free meeting to discuss how we can assist you to increase and manage your personal wealth.