One of the only certainties in these uncertain times, is the need for business owners to have complete oversight of their cashflow like never before.
Cashflow and budgeting forecasts are critical to understanding the current position of your business, its viability, attracting creditor agreement and identifying options to maximise business sustainability through the allocation of possible financial buffers.
As the threats to business from rising inputs continue, understanding the cashflow of your operation has never been more important.
A cashflow will allow you to take stock of where your financial challenges lie, the extent of disruption, higher operating costs and lost revenues.
By taking decisive action today, you can ensure your business remains agile and as prepared as it can be in this rapidly changing business environment.
A transparent cashflow will help you to identify if your business has enough money to survive the next three, six, twelve and eighteen months of operation. Once a cashflow has been completed, you can then identify cash preservation measures and available credit facilities.
While this may all seem obvious, surprisingly it isn’t. Many business owners who had positive cash flow in the past, didn’t always have the need to stress-test their business position in a way that they might require today.
In the current unpredictable climate, a better understanding of actionable insights and where and how you can quickly free up cash in your business is essential to its longevity.
That’s where an accurate cashflow can help to ensure your business has the best shot of being sustainable long into the future. It will support you to identify and weigh up various scenarios and respond more proactively to the many challenges that are arising from a volatile economic landscape.
A professional cashflow can also help you to identify ‘quick wins’ within the business to free up finances, assets that may be able to be divested and structural changes that may be required to refocus your efforts.
Acting decisively and with full oversight is going to be critical for many businesses if they are to come out the other side of this latest challenge with the doors still open.
Article written by Michael Brennan (Director) – Townsville
Admitted as a Solicitor in 1999, Michael practiced in commercial law before becoming an insolvency practitioner. In addition to maintaining his Practising Certificate as a Lawyer, Michael is a Liquidator and Bankruptcy Trustee.