Being able to conduct regular and accurate cash flow forecasts is an essential tool for any small business owner. Having a good idea of their cash position and what it might look like in the future puts them in a better position to make decisions about future business growth.
Where you can help is by providing them with the necessary tools to conduct a cash flow forecast. A template and a guide are the bare essentials, and it’s always a good idea if you offer to review their forecast and help them analyze it, especially if they haven’t done one before.
Proper cash flow forecasts mean business owners can decide whether they should boost their capacity for future growth, if they can afford to hire extra staff, or if they should purchase new machinery or equipment. Or they could be thinking about entering the export market. Even if they’re not making plans for large projects, it’s still essential that they know their cash flow position from one month to the next.
Check out this article on the importance of cash flow forecasting.