Healthy cash flow is essential for small businesses. Achieving a positive cash flow begins by first understanding the cash flows of your business and preparing a cash flow forecast. This forecast summarizes all cash coming into and going out of your business and should be consistently updated.
One popular method is the 13-week rolling cash flow forecast. This forecast will help you prepare for historically difficult periods and seasonal trends. If your business is seasonal, be sure to review your business cash flow this way to help prepare for future dips.
Organizations of all sizes should plan to forecast on cash flow, a responsibility typically delegated to an accountant. Small to midsize businesses that do not have internal staff can rely on an outsourced agency to provide ongoing accounting support and financial analysis.