Guide

Identify potential cashflow problems

Keep business finance forecasts up to date

Keeping an accurate and up-to-date budget or business plan will help you manage your cashflow, by allowing you to:

  • record actual figures
  • compare actual figures with the budget or plan
  • record any inconsistencies and investigate the reasons for them - eg a one-off, seasonal demands, changes in the economy or problems in your business that could be improved
  • review whether the budget or plan should be updated

You should also consider completely new factors such as an unexpectedly large order or the arrival of a new competitor on the market, and whether these changes need to be incorporated into your business plan or budget. You might choose to:

  • Keep the original budget - but measure and understand any variances in the actual figures against the original budget and new forecasts.
  • Use rolling budget/forecasts - as each month's actual information is finalised, update the budget to provide an additional month's data. This means that you will always have a 12-month projection.

Whatever system you use, it is important to keep your eye on the forecasts and keep them up to date.

For more information see Invest NI’s tutorial below on maintaining a positive cash flow - it will outline actions you can take to manage your cash effectively and provide you with key tips to keep your business financially sound.