Cash Flow/Budget

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Cash Flow Forecasts

The cashflow of a business is often said to be the lifeblood of the business. It is very important to know at any point in time the business' cash position. An effective system of forward planning will ensure that the cash balance is enough to meet current and future financial requirements. If this is not the case the business might be forced to close, even if it is an otherwise profitable business.

The purpose of cashflow budgets is to help you and other interested parties (eg banks, creditors and investors) to assess the following.

bulletYour business ability to generate positive cashflows in the future. There is often a long time delay between the sale of an item and receipt of payment for the sale. A profitable company does not always mean a cash positive company.
bulletYour business' ability to meet its financial commitments as they fall due, including the servicing of debt and the payment of dividends. The goodwill and reputation of your business depends greatly on its ability to meet its financial commitments as they become due.
bulletYour business' ability to obtain external finance when necessary.
bulletYour business' ability to meet the interest expense and capital repayments of any external debt. It is desirable to plan so that the interest expense is minimised as much as possible.
bulletYour business' ability to fund changes in the scope and/or nature of its activities.

Cashflow budgets are also a guide for the owner of the business and for business managers. They help minimise waste and unnecessary expenditure and maximise the efficiency of the business.

ThePractice will assist you in preparing your cash flow forecasts based on intimate knowledge of your business and the economic environment in which it operates. 

Call us at (876)-927-4592 or (876) 927-4593 or email us at info@thepractice-jm.com for a free initial consultation Today.

 

Budgets

Budgeting is sometimes seen in a business sense as the planned allocation of available funds to each department within a company. In its true sense however, budgeting is far more than planning for expenses. It includes planning for income, expenses and all other business activities ahead of time so that management can make better decisions in managing the business.

A proper budget is critical to the success of a business. Budgeting allows executives to control overspending in less productive areas and put more company assets into areas which generate significant income. It also looks at the expected timing of cash flows and enables them to make wise investment decisions where surplus cash will be available, and therefore  grow the business at a faster pace. An effective budget looks at all the activities of the organization and plan for the timing of income and expenditure in line with economic realities.

ThePractice will assist you in preparing effective budgets based on intimate knowledge of your business and the economic environment in which it operates. Don't just put figures on paper, plan for the success of your business.

Call us at (876)-927-4592 or (876) 927-4593 or email us at info@thepractice-jm.com for a free initial consultation Today.

 

 

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Send mail to info@thepractice-jm.com  or call us at (876)-927-4592 or (876)-927-4593 for a free consultation.
Last modified: January 08, 2011