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Cash Flow Management

At Vertice Services we believe that failing to plan is planning to fail. To help you to plan properly, you will be assigned to one of our business advisers. Our team of SFEDI full-time professional business advisers (all with hands-on business experience) can guide you through the essential steps to launching your own business.

We also have a pool of business consultants with specialist knowledge, ranging from accounting to new technology, who can help you with specific problems.

The first essential for a new business is a robust and realistic business plan. Your business adviser will give you all the expert help you need to compose it. Your plan will include the following:

CASHFLOW MANAGEMENT: THE BASICS

Cashflow forecasting enables you to predict peaks and troughs in your cash balance. It helps you to plan borrowing and tells you how much surplus cash you’re likely to have at a given time. Many banks require forecasts before considering a loan.

ELEMENTS OF A CASHFLOW FORECAST

The cashflow forecast identifies the sources and amounts of cash coming into your business and the destinations and amounts of cash going out over a given period. There are normally two columns listing forecast and actual amounts respectively.

The forecast is usually done for a year or quarter in advance and divided into weeks or months. In extremely difficult cashflow situations a daily cashflow forecast might be helpful. It is best to pick periods during which most of your fixed costs – such as salaries – go out. The forecast lists:

  • receipts
  • payments
  • excess of receipts over payments – with negative figures shown in brackets
  • opening bank balance
  • closing bank balance

It is important to base initial sales forecasts on realistic estimates – see our guide on how to forecast and plan your sales. If you have an established business, an acceptable method is to combine sales revenues for the same period 12 months earlier with predicted growth.

Please contact us on 0207 328 8338 for a friendly and informal discussion of your requirements.

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