Cash is king—especially in today’s unpredictable economy. Yet many business owners are flying blind when it comes to cash flow.
Why Forecasting Matters
Without a solid forecast, you could be caught off guard by seasonal dips, rising costs, or delayed receivables. Forecasting gives you a roadmap to:
- Predict and plan for slow months
- Strategically time investments
- Avoid shortfalls that affect payroll or vendor relationships
How to Build a Forecast That Works
- Start with Historical Data
Use your last 12-24 months of income and expenses to identify trends. - Factor in Seasonal Variability
Account for predictable highs and lows (e.g., Q4 spikes, summer slowdowns). - Build in Contingencies
Include scenarios for late payments, inflationary cost increases, or unexpected repairs.
Example: A service-based business used forecasting to identify a likely shortfall in August. They proactively adjusted their marketing spend and offered early payment discounts to improve cash inflow—avoiding a cash crunch.
Action Steps:
- Use cloud-based accounting software to update forecasts monthly
- Partner with your CAAS advisor to regularly review and revise
If you have questions about your cash flow and how to forecast more effectively, leave a comment below or feel free to contact me directly. I’m happy to help!
