Cash is King

Regardless of whether you’re a startup or a well-established business, the ‘cash is king’ adage will always ring true.

So let’s take a moment to check in. Do you have a handle on your cash needs (i.e your projected income and expenses) for the next 12 months?

Forecasting will help keep your finger on the pulse of your day-to-day business operations – as well as help with strategic planning.

Whether you’re a contractor, a sole trader, or own a company; there are many benefits from forecasting your cash expectations. These include:

1. You’ll be better-prepared to ride out the peaks and troughs of cashflow
2. You’ll have a good handle on your expected tax position for the year
3. You’ll be more confident when planning for growth, expansion or asset purchases
4. It helps build your case when you’re looking to borrow from the bank or other lenders
5. It lets you benchmark your performance (against previous years, or other businesses)

There are few golden rules when it comes to forecasts. They need to be accurate, they need to be easy to understand, and they need to be realistic.