Effectively managing cash flow is one of the most critical skills business owners must possess if they want their companies to survive and grow profitably.
Yet creating an accurate cash flow forecast is complicated because it involves measuring and monitoring many variables and making educated guesses about the performance of the company.
For business owners who want to be directly involved in forecasting cash flow for their companies, here’s how you get started.
A good cash flow forecast does not need to be perfect. Start with what you know, update it every week, and compare it with what actually happened. Over time your guesses get better and surprises get smaller. To see how cash links to profit, have a read of what is profit margin. There is also a general page on cash flow on Wikipedia.
