The importance of cash flow predictions
Finding all the money we can
When you fail to plan, you plan to fail.
How do you know that you are on target if you have nothing written down? Are our sales higher or lower that the initial speculation?
These are just some of the questions that we need to ask ourselves. If we don’t know where we are at, how can we possibly improve it? We learn the importance of tracking items so we can improve upon them. The next question people have is, where do I even begin?
Let`s start with predicting income. Questions to ask yourself may contain some of the following:
• Do I have a routine of reviewing my accounts receivable and ensure that all customers that I have agreed to give credit to is paying on time?
• Do I have convenient systems in place that makes it easy for my customers to pay me? Eg.credit cards, paypal
• What are my sales forecasts and am I on target?
• Am I selling enough to break even or make a profit? (Questions are getting a bit harder now)
Then there is the expense side of things:
• Do I have my automatic monthly automatic deductions accounted for? (if any)
• Do I now what my estimated utilities costs are?
• Do I pay my operating costs on a regular basis
• Do I know what my gross margin is? (Ok, what did you just ask me?)
If these questions leave you confused or with a feeling that you want to enquire more, perhaps that is a sign to explore further and see what money is easily obtainable. Your mindset can make a huge difference in the operation of your business. Is yours worth catching?