What is Cash Flow Forecasting?

Cash flow forecasting is a way of estimating the flow of cash coming in and out of your business, across all areas, over a given period of time. A cash flow forecast will show your projected cash based on income and expenses. It is a crucial tool when it comes to making financial management decisions related to funding of operations, capital expenditures and investments.

Cash Flow forecasting can be carried out for a range of time periods. A short-term cash forecast may cover the next 30 days and can be used to identify any funding needs or excess cash in the immediate term. A longer term period can be selected in order forecast and plan for the next 6 months or perhaps even the next 1-3 years.

Being able to predict and project your cash position is a top priority should be a top priority for your business, as it will help you stay on top of your cash flow, identify and address any future cash flow problems that may arise, and make informed business decisions.

A cash flow forecast will tell you if you will have a positive cash flow (meaning more cash is coming into the business than going out) or a negative cash flow (meaning more cash is going out than coming in) at a given point in time. As we help you prepare these forecasts for the upcoming months, you will be able to better manage cash surplus and plan for the periods when you will be expecting cash shortages.

At Profit & Loss Management, we help our clients with all types of business needs whether it is accounting, payroll, taxes, consulting, and/or forecasting in order to help them stay focused on growing their businesses.

If you are looking to have one firm take care of accounting and tax needs then you have arrived at the right spot! We offer a special service which we call Outsourced Accountant through which we can take care of all the accounting, payroll, hst, consulting, personal tax, and corporate tax needs for you and your business! Curious if that is suitable for you? Click on the following link to find out more:

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