We accept that a certain amount of historical analysis is necessary in accounting.
However, wouldn’t it be so much better if accountants could also help change the future?
A cash-flow strategy is an essential ingredient of growth, enabling confident decisions and expansion as well as risk to be taken without jeopardising the overall business – and it’s something your accountant should be able to provide for you.
However we’re not talking about simple spreadsheets ased on current data and subjective predictions. Effective cash-flow forecasts are based on analysis of the key profit and financial drivers, acting as a SatNav system for the next three, six, 12 months or even 3 years.
I have seen them transform the fortunes of a number of businesses, helping them to make key decisions in areas such as sales, pricing, efficiency and funding. After all, if you don't have a strategy, how will know if you have got there or not?
Most importantly, a good quality cash-flow forecast regularly monitored against a business's performance will help substantially with the company's bankers or other stakeholders. It will present the company with a positive and professional image, something absolutely essential in today's competitive environment.
Banks will always say the same thing: the funds are there for companies with the best prospects and the most professional management... make sure you are one of them!
