What’s included in the cashflow forecast? Well, this shows the cash movements over a period of time. Watch our video for some more information.
So, in your annual cashflow forecast it will show how much cash and that includes all your bank accounts you have on the first day of the year.
It then shows how much was spent or came in to give you a figure at the end of the year.
It categorises that expenditure between the income expenditure on your trade, income expenditure on buying assets, and also on any other investments or loans.
Again, this is like a movie, i’s a moving picture of the business. But the great thing with the cashflow is that it’s fact. There are no accounting assumptions in there.
The bank balance at the start of the year and the bank balance for the year end, in fact, you can’t play with those.
And for many business owners, the cashflow is the single most important financial statement.
This is because you could be making a profit that have no cash.
You might be making loads of sales with no one’s paying you for them, you’re going to go bust, whether you’re profitable or not.
I know a lot of really clever people who only look at the cashflow and they’ve got great businesses.
If you would like to learn more about cashflow, please get in touch.