| "Cash is fact...everything else is opinion" |
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| If cashflow management is not at the heart of your business then there may be trouble ahead. |
| Your cashflow forecast starts by looking backwards at actual receipts and payments to see how quickly you are being paid, how quickly you pay suppliers and what the patterns and pinch points are. |
| We can then look forward. By combining your profit forecast with actual data on customer and supplier payments we can build a cashflow forecast that will: |
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Predict when any short-term problems may arise |
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show how much headroom you have against your borrowing facilities |
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improve your dialogue with your bank manager |
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show you what levers to pull to improve cashflow |
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| Your cashflow model should be at the centre of your business and we can help you get it there. |
| Cashflow |
January |
February |
March |
| |
£000 |
£000 |
£000 |
| Receipits |
|
|
|
| Sales revenue |
2,500 |
2,500 |
2,500 |
| Payments |
|
|
|
| Purchaces of stock |
1,250 |
1,250 |
1,250 |
| Running costs |
1,000 |
1,000 |
1,000 |
| Total Payments |
2,250 |
2,250 |
2,250 |
| Opening bank balance at |
|
|
|
| Start of month |
1,000 |
1,250 |
1,500 |
| Add total receipts |
2,500 |
2,500 |
2,500 |
| Minus Total Payments |
2,250 |
2,250 |
2,250 |
| Banks Balance at end of month |
1,250 |
1,500 |
1,750 |
|
| The effects of Cashflow problems may include |
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Your business may breach its borrowing facilities |
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Suppliers and staff paid late |
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Debtors go bust before your are paid |
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Interest costs and Bank charges are higher than expected |
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Bank may take control of your business |
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| At Accountancy Champs we will help you |
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Build a simple cashflow model using Spreadsheets for flexibility |
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Model backwards for at least three months prior forecasting forward |
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Tighten up credit control to advance cash inflow |
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Negotiate better terms with suppliers and HMRC to reduce or delay outflows |
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Review margins and overheads to reduce costsand cash outflows |
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Benefits |
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Forewarned is forearmed - you can solve cashflow problems before they get out of hand |
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More cash in your business reduces risk and allows you to invest for future growth |
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Looking at cashflows will help you to improve profitability |
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You are back in control of your own business |
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Fewer sleepless nights! |
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Running a business in this present climate is difficult and challenging. Running a business without a cashflow model is like sailing a rudderless ship which has a good chance of going under.
Improve cashflow and you increase the chance of your business growing!
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| Contact us for a simple cashflow model to help you get started. |
| Sign up to our Cashflow service package for 12 months and get 20% off your bill. |
