As a business owner, you’ll need to know how much cash you have at hand, at any given moment, as well as how important factors influence your ability to spend, meet payroll requirements and pay your bills. As any good budget planner will know, a lack of planning can cause major issues, with cash flow being restricted and your available funds being limited when you need them the most.
Central to this task is creating a small business cash flow budget, as it can help you avoid any unexpected financial pitfalls. Using freely available budget template downloads found online, you can put yours together and reveal any approaching cash flow problems that might impact your business negatively.
Cash Flow Budgets Explained
As business financial planning tafe courses teach, a cash flow budget (often called cash flow projection) provides a birds-eye view of your income and expenditure over a particular period. Offering a forecast of the cash you’ll receive and spend, you’ll gain a wealth of insight into what’s coming in and going out over your entire business.
Your cash flow budget report will record your income and use all available data to predict what your cash flow will be like over a set period (typically created weekly, monthly or even quarterly). And as taking an OCA budgeting course online will show you, this brings numerous benefits.
The Advantages of a Cash Flow Budget
Ok, so we’ve covered what a budget planner cash flow budget report is for and now we’ll look at its benefits - over and above simply having a firm grip on your company’s revenue stream. The advantages are many and include:
- Peace of mind that your day-to-day commitments are met
- Demonstrates to your bank manager that you’re able to afford any requested borrowing
- It allows you to determine the best time for purchases and expansion accurately
- Planning for possible shortfalls and surpluses is made easier
- A benchmark is provided for your future growth ambitions
Even if your business is consistently making a healthy profit, you still need to use cash flow budgets, as otherwise, you can quickly become short on available cash. Even though your P&L sheet might not deem inventory, assets and equipment as losses, you can be left financially restricted.
Get the Knowledge You Need With a Budgeting Course Online
Managing your business finances can be tricky, which is why many people turn to accountants for assistance. However, if you’d like to be spared that expense, it’s possible to boost your financial admin knowledge with a budgeting course online like our Prepare & Monitor Budgets Course. Modular, video-based and CPD-approved, we offer engaging training on your terms.
Skills Development for Financial Careers
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