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How cash flow forecasting is valuable for your business
22 September 2024
In order to effectively manage future cash flow, it's important to forecast your cash flow. This allows you to project your financial position for the upcoming months and take necessary steps, where needed, to protect your cash reserves. This allows you to maintain financial stability, plan for various scenarios, reduce costs, and develop strategies to maintain your cash flow.
Effective Cash flow forecasting strategies
Remaining control of the cash coming into and out of the business is the key focus so you can accurately predict your financial position and resolve any issues. Here are some key ways to get more from your cash flow forecasting.
- Conduct regular forecasts: The financial landscape is changing on a daily basis so a cash flow forecast is not a document that remains static. Variables and external drivers are changing each day, so it’s vital that you run frequent forecasts and react swiftly to any projected cash issues as they become apparent.
- Explore new revenue streams: In light of recent changes in sales and demand for services across many industries, it’s essential to explore new income opportunities. Consider introducing new products or services or partnering with new businesses to boost revenue and manage unavoidable expenses.
- Implement cost-cutting measures: Minimising cash outflows is crucial for maintaining healthy cash flow. Evaluate and reduce unnecessary expenses, such as software subscriptions, or excessive inventory. Negotiating better rates with suppliers can also contribute to cost savings.
- Assess staffing requirements: Nobody wants to make anyone redundant, and there are alternative ways to reduce staffing costs and resourcing without getting rid of staff completely. Reducing working hours or redeploying staff in different roles are options that reduce payroll costs, while also looking after your staff.
- Run various scenarios: When running scenarios, changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Many of these will be in a long-term plan once conditions improve. Scenario-planning lets you answer questions and will give you some hard evidence on which to base your decision-making and strategic outlook over the coming months.
- Explore funding options: If your cash flow forecasts show a major cash flow deficit coming up, you’ll likely need additional funding to get through. We can assist your business to investigate funding opportunities from grants, banks, loan providers, alternative lenders, and crowd-sourcing funders.
Get started with cash flow forecasting
Talk to us about setting up cash flow forecasting in MYOB. Effective cash flow forecasting is key to in having the right information for sound decision-making. If you’re not already running cash flow forecasting, let us help you enhance your cash flow management and ensure you’re well prepared for the future.
The end of the financial year is fast approaching, so if you’re balance date/end of financial year is 31 March, there are a few things you need to do to help us prepare your financials. Take a stocktake If your business sells products or has stock, you’ll need to do a stocktake on 31 March. If you’re a business that sells products, then you need to take a stocktake of your physical inventory. If you’re a farmer, then you need to take a physical livestock tally. Send in your EOY papers Compile a folder (digital or hard copy) with a copy of the following documents: Bank statement that shows the balance on 31 March 2025 for all your bank accounts and loans. Insurance invoices. ACC invoices. Loan statements for the year (if applicable). Any new loans or refinancing documents. Invoices for assets purchased and sold. GST workings and reports. Submit the online questionnaire You’ll also need to fill out and submit the online questionnaire. You should receive an email from us in April/May, with a link to fill out and submit the questionnaire. If you haven’t received an email with the link by the end of May, let us know.
At Gunson McLean we are more than just a business offering financial expertise we also support our communities in Dargaville and Whangārei. By partnering with various local organisations, we help sustain and strengthen sports, recreation, and community initiatives in the region. Empowering Local Sports Clubs We understand the role sports play in bringing people together, promoting teamwork, and supporting youth development. We are proud to sponsor the Old Boys Marist Rugby & Sports Club, Hikurangi Rugby Football Club Inc, Maungakaramea Hockey Club, Maungakaramea Bowling Club, Mid Western Rugby Squash Club, Kamo Rugby & Squash Club, New Zealand Vikings Rugby Football Club Inc., and the Cobham Cricket Club. Promoting Outdoor Education We also believe that outdoor education is essential for youth development and are proud to work with the charitable trust, Pātaua Outdoor Education & Recreation Trust (POERT). We have been closely involved in the Trust’s activities for the past 8 years – handlings its financial matters – and Craig Gunson is the current Treasurer. Backing Community Halls & Facilities We’re proud to support the Whareora Hall Society and Whareora Cemetery Board as well as local cycling and motorcycling groups Marsden Wheelers Cycling Club Inc., and the Whangārei Motorcycle Club. We are passionate about the causes we support, and the opportunities and growth this enables in our Dargaville and Whangārei communities.
Most people agree that optimising your business is a good idea and spend hours looking at optimising the supply chain, storage, overheads etc. However, they forget that people are one of the most critical elements in your business. By providing a caring, supportive workplace for employees you also drive the success of your business. Studies show happy workers are productive workers and, as an employer, it’s a no-brainer to provide a workplace where employees feel valued, and where they can flourish. Here are five key ways to build employee relationships, nurture your team, and create a great workplace for your employees: 1. Invest in your employees This doesn’t mean ‘casual Friday’s’ or a pizza night once a month. This is about offering your employees access to training programmes, workshops, conferences, and mentorship programmes. It’s about the professional growth of your employee and how you can enhance their skills and make them feel truly valued as team members. 2. Create a positive work environment Creating a positive work environment is about cultivating a workplace culture that feels positive and supportive of your employees. Be open and transparent with your employees, listen to their feedback and have a strong focus on employee wellbeing. This could include offering flexible working arrangements, benefits such as health insurance, and other perks. 3. Recognise and reward your employees When an employee goes above and beyond, make sure your recognise and reward them. This could by through a performance bonus, employee-of-the-month programmes or even extra time off in lieu. Feeling valued comes partially from feeling rewarded and can be an amazing motivator. 4. Give employees autonomy One of the key ways employees feel trust, is by being given autonomy. Being trusted to come up with their own solutions, processes, and ideas is key to making people feel as if they ‘own’ their role. This helps employees feel fully involved and also brings new ideas, solutions, processes, and efficiencies to the table. 5. Put wellbeing at the heart of your culture Life is stressful. And work-life can be stressful. A well though out wellbeing programme can help your employees manage stress and, in turn, benefits your business. A wellbeing programme is different for each business but some ideas could be checking in with team members, creating a ‘ask for help’ culture, flexible working arrangements including work-from-home days, and offering mental health support. Making sure you’re a caring and supportive employer is vital to your business strategy. With a team who feel valued, nurtured, and encouraged, you’ll all be happier and more productive.
To discuss all your account matters please call us on 09 438 1001
