Forecast weekly cash flow
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Making accurate cash flow forecasts is vital for the continued
survival and health of any business. Probably the most important are the
monthly and yearly cash flow forecasts, as these tend to be the figures looked
at by investors and financial institutions to get an idea of the health of a
business before they extend any significant credit. However, daily and weekly
cash flow projections are also useful in terms of: - Assessing the value of new investments
- Identifying possible cash short falls so you can take remedial
action if required
- Allowing for the assessment of different strategies, such as
weekly sales
With business being so competitive and information moving so quickly,
accurate cash flow forecasting is more essential now than ever before.
Fortunately, weekly forecasting is now a fairly simple process, and the actual
equation itself is fairly straightforward: starting cash balance plus projected
cash inflows minus00 projected cash outflows equals projected cash flow. CalculationsYou can of course do the
calculations yourself manually, or you can select a software package off the
shelf that will deliver the correct figures with little effort. Using a
software package makes entering the necessary figures relatively smooth and,
most importantly, simplifies filing. However, no matter how good the software or your manual inputting
procedures, as with other forms of cash forecasting it is necessary to keep
effective business records. These should include: - All cash inflow documents, such as sales receipts and asset
disposals
- All cash outflow receipts, such as supplier payments and rent
payments
As in other examples of cash forecasting, it is essential that you
factor in special events that might have effected the week in question. There
is unlikely to be a week that can be taken as completely ordinary - this is the
reason why weekly forecasts are of more use to yourself rather than to
others.
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