Speaker: Myn Cotterill FCCA, Financial Controller
What is a cashflow forecast?
Myn Cotterill FCCA: What is cash flow forecasting? Well, profit is not the same as cash. You can make the sales. But if the customers don't pay, then you don't have what you need to pay all of your suppliers. So you need to come up with a list of all the money that's owing to you and all the money that you're expecting to have to pay out and it needs to go forward at least 13 weeks because your VAT is paid at the end of the quarter and you mustn't forget tax man as well as all the suppliers.
What's the impact of not having an effective cashflow forecast?
Myn Cotterill FCCA: If you don't have good credit control in place, you've probably got suppliers ringing you and chasing for money because once you've broken a promise to pay a couple of times, they ring more. They threaten legal action sooner. They don't trust you. You end up just spending all day tied up in horrid phone calls of the sort that nobody wants to have to deal with.
How can YRH Finance Team help?
Myn Cotterill FCCA: So what YRH would do about this is the first thing to do is optimise your accounts receivable and your accounts payable processes. So firstly, get the money in it makes it a lot easier to share it out if you've actually got some to start with. Secondly, organise your accounts payable. So you may make payment runs every two weeks or at the end of the month and you get into a situation where, because you've got an accurate forecast, you know, who you're gonna pay when they ring up and ask you say I'm gonna pay you this money on this date and then you keep your promise. And once you've built up a really solid reputation for paying people, when you say you will, they will ease off and trust you more and you can spend more time driving your business forward with the peace of mind that knows that you've got an accounting function that's really working for you.
