See where cash is heading over the next 13 weeks, the quarter and the year, and find the pinch points before they arrive.
Profit and cash answer different questions. A business can be growing and profitable on paper and still find the bank balance tighter every month. Our Finance Hub builds and runs cash flow forecasts for businesses with revenue from around $1 million to $50 million, from our North Sydney office, so the directors can see the shortfall coming and decide what to do about it.
A cash flow forecast sets out the money expected in and out of the business over the weeks and months ahead, and the balance that leaves at each point. We forecast across three horizons, 13 weeks rolling, the quarter and the year, keep the forecast up to date against what actually happened, and model the cash effect of a decision before you make it.
Profit counts a sale when it is made. Cash counts it when the customer pays. In between sit the cycles a forecast has to follow, and they are usually where a growing business gets squeezed.
How long customers take to pay. When sales grow and payment times stay the same, more of the business’s money is tied up waiting to be collected.
When suppliers expect to be paid. Paying them faster than customers pay you widens the gap.
BAS, PAYG withholding and super arrive on fixed dates whatever the bank balance, and they grow with the business.
New staff, a new location or more stock are paid for before the revenue they bring arrives.
Our article on cashflow viability goes further into why cash and profit are different questions.
A forecast earns its keep when a decision is on the table. A virtual CFO models the cash impact of the choice in front of you: a new hire, a second location, a large purchase, an acquisition, a refinance or a capital raise. You see how much cash it takes, when, and how long until it comes back, before anything is signed.
Banks and investors want to see how their money will be used and how it will come back. A forecast built from reconciled numbers, tied to the budget and kept current against actual results carries far more weight than a spreadsheet put together for the meeting. We prepare forecasts for loan applications, refinancing, bank reviews and capital raises, as part of getting the business ready for that scrutiny.
A forecast is only as good as the opening balance and the records under it. We bring the books up to date first, through our accounting clean-up team where they need it.
We map how cash moves through your business: when customers pay, when suppliers are paid, and the fixed dates for tax, payroll and loans.
Our outsourced finance team updates the forecast against what actually happened, weekly or monthly, so it stays a working tool.
The virtual CFO takes you through the forecast alongside your management accounts, flags the pinch points and talks through the options.
Where the books are clean and current, forecasting can usually start within two to four weeks. Where they need work first, it takes four to eight weeks. Cash flow forecasting is part of a Finance Hub engagement, a monthly fee usually between $3,000 and $15,000 depending on scope, agreed in a fixed-fee proposal before the work starts.
A first conversation is enough to see where cash is going, where the pinch points are likely to be, and what a forecast would show you.
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