Business Budgets and Cashflows

Creating a budget may not sound like the most exciting thing in the world to do, but it is vital in keeping your financial house in order. A cash flow forecast (or cash budget) is the main financial forecast a business will prepare to measure how much cash is needed to operate the business and when it is needed. It adds the dimension of time to the annual sales and expenses forecasts so that you can predict the future cash needs of your business on a monthly basis and check whether you will be able to pay your bills. A cash flow forecast measures liquidity, the ability of the business to meet its commitments as they fall due.

Without cash to keep things running you'll quickly go out of business. If cash flow isn't managed correctly, a business that's undergoing growth is just as likely to encounter cash flow problems as a struggling enterprise. A surge in sales will usually require an increase in the money required for working capital (materials, equipment, labour), and if customers take too long to pay, the business could be in serious trouble.

A cash flow forecast will show you if, and when, you will run out of cash essential to run your business. Prior warning allows you to work out solutions to anticipated temporary cash shortfalls or arrange short-term investments for temporary cash flow surpluses.

Therefore, at Fortis One we understand the importance of your budget in underpinning your business and we will assist you create your cash flow budget.