• 5 ways high quality cash flow forecasts can support your business

5 ways high quality cash flow forecasts can support your business

19 March 2020

High quality cashflow forecasts and management information packs do matter. Here are five ways they could make a real difference to your business.

1. Strengthening internal management alignment

In some businesses, the planning process can be relatively ad hoc with individual managers having differing priorities and making their own assumptions. Establishing a consistent approach to forecasting and making it a ‘business as usual’ process strengthens internal cohesion and clarity, keeping managers focused on the right areas when investing in products and services.

2. Building business resilience

We live in uncertain times politically, economically and environmentally. Although it is never possible to predict the future, management teams can consider possible scenarios and how these might affect the business. For example, what happens if the business starts trading internationally under WTO rules? What happens if corporation tax rises? Forecasts can be adjusted for new assumptions to identify potential cashflow pressure points – a form of risk management that helps to make the business more resilient.

3. Increasing business understanding

Management information packs that identify key performance indicators (KPIs) and highlight when performance falls below critical thresholds enable proactive action to address any weaknesses. For example, a subscription-based business might track whether customer renewals fall below the normal level, or a product manufacturer might focus on an increased level of product returns.  

4. Generating evidence of sound management processes

Generating timely, effective cashflow forecasts doesn’t only help management teams run the business, but also builds up a track record of sound processes being applied. This may be beneficial in 12 or 18 months if you decide to seek new funding or to sell the business. Banks, investors and potential acquirers will all take comfort from the fact that the business has been run using sound information for an extended period of time.

5. Supporting a managed business closure

Not every business will be in growth mode. Some management teams may be looking to close down all or part of a business in response to market changes. If they want to close the business on their own terms, then it’s important to think through details such as what assets might be liquidated and the cost of any redundancies. If temporary funding is required to manage the winding down process, this can be identified and action taken in good time.


Cashflow forecasting is a vital component of business planning – and plays a key role in providing management teams with insight into future issues that might arise. Taking advice and having an objective view from experts who can review your forecasts through an investor or funder lens can add real value and contribute to your commercial objectives.

To find out more about our cash flow forecasting solutions, download our brochure.

If you would like to discuss any of these issues, please contact Mark Sykes.