Knowing your company thoroughly is the starting point for making a cash flow forecast.
Having profits is not synonymous with having liquidity, so you should not be overconfident.
Liquidity is, in all businesses, an issue that requires special attention. What's more, if initial outlays are a natural part of starting an entrepreneurial project, a cash flow crisis can put dominican republic email list an end to the adventure. You have to pay attention to how money comes in and goes out, and the best way to do this is through a cash flow plan .
Start of marked textTWEET IT! A cash flow crisis is an unpalatable plan for your business. Learn how to avoid them with a good plan.End of marked text
A good plan is also a control tool. Thanks to it, you can track possible deviations and take measures to regulate the situation. It is also a learning tool that helps improve your understanding of how money should flow in the business.
What is a treasury plan: Practical examples of useful information
It consists of a forecast that allows you to visualize payments and collections. With it, you can anticipate the company's financial future and guide decisions in the right direction.
To prepare it you will need certain information , such as, for example:
A breakdown of your cash flow's starting position . You should also understand the status of other current assets : amounts, categories, conditions for their conversion into cash, etc.
Analysis of non-current assets . You must know how long it could take to liquidate them and with what procedure and risks. In addition, you must understand the cash outflows generated by their maintenance and replacement.
Investment projection . This will affect the initial outlay, but may require additional recurring payments. You will also need to pay attention to expected higher collections or the translation of cost improvements into payment reductions.
A breakdown of your debts that will allow you to see the payment schedule and the possibilities of refinancing. We will also look at the avenues of external financing that you have not yet explored, but that could provide liquidity at a given time.
The study of the environment with which to project scenarios and design differentiated actions for each of them.
