Planning your own cashflow forecast and keeping on top of your numbers will always see you well positioned in business.

Remember Cash is King. The key to having cash is planning your cash ins and outs and keeping on top of your numbers. Especially your true cash position.

As Accountants in Mornington Peninsula and Bayside we know the processes that help businesses thrive. We know the mistakes businesses make with their cash flow management and we also know the behaviours and decisions smart business owners and leaders make to drive positive positions.

Some businesses outsource their complete accounting responsibilities and planning. Others look to self management. Others simply ensure they understand the steps that can be taken to improve their business.

We have worked to create five steps to help you prepare your own cashflow forecast:

1. Make a list of all your cash outflows by month, 12 months in advance.

This does not need to be a tedious process. Once you have set up a system and good habit, this will not only come naturally, but you will not believe you didn’t operate your business with this simple cashflow forecasting step.

2. Don’t forget to account for your tax obligations such as future income tax payments and GST, PAYG, Super.

We see this mistake in both small businesses and larger operations. For some, it is a case of not knowing the detail and putting the work off for a later date. With tax payments and GST, PAYG and Super, that later date always arrives. Sooner than you think. For big businesses, it is a case of not being across the numbers to a fine degree and somewhere along the way, something obvious but simple, has been missed. It happens and our job is to fix it. But as with most professional Chartered Accountants, the recommendation will always be to plan to avoid mistakes and inaccuracies.

3. Be sure to add in owners’ wages.

This is crucial to the cashflow forecasting process. In some cases, this will highlight the minimum amount the business needs to make in order to break even.

4. Use last years sales figures to form the base for future cash inflows.

Consider changes and what adjustments are needed as well as the time customers take to pay. For a more complex cashflow forecast, this can be volume based and broken down by product unit. Otherwise as a start, use $ from prior year.

5. Give yourself a deadline.

Set a date. Without a deadline, prepare your own cashflow forecast for some may never happen. The cycle of disruption will continue and you are less likely to see the real numbers.

“At a minimum, preparing your own cashflow forecast will give you a snapshot of what is coming in and going out. It will help your business prepare for times of crisis (by storing cash). It also highlights options to pursue business growth opportunities,” Danielle, Chartered Accountant

Cashflow forecasting keeps you informed of your numbers.

It is important to measure your forecast against your actuals to either assist in better planning or to highlight unnecessary cash bleeds.

Contact us for your free cashflow template created by a Chartered Accountant for Bayside and Mornington Peninsula businesses. And if you want to really get involved in cashflow planning by delving deeper into sales targets and KPI’s based on different scenarios etc, give the team at Tier Accounting a call.

Book an appointment today to talk through your cashflow forecasting options.

Contact Danielle at