Three Effective Ways to Accurately Forecast your Business Cash Flow

For Collins businesses forecast their cash flow. This allows a company to predict is annual profits vs. its end of the year debt. Also this enables business owners to have a clear glimpse of where they are making the most and determine who they owe money. This helps them in setting their financial goals for the following year. A good cpa fort collins can help them in their forecasting. Here are tips on setting up your cash flow forecasting.

Estimate How Much Money You Want to Bring In

Refer to your previous sales history to have these estimates. Look at the past two years and have a good idea of the type of weekly or monthly sales you want to see. Of course your sales are expected to be inconsistent so consider similar patterns every year and factors which could change like promotions or trade shows as you make your forecast.

Think About the Terms in Which You Will Be Paid

For a lot of your sales, you could be waiting at least 30 days to see the cash you expect. It is important when forecasting your cash flow to estimate if you expect payment from sales. If you just bill your customers or operate on traditional trade credit, you have to assess your average days sales outstanding (DOS) and consider this in your forecast.

Determine the Amount Of Money You Can Spend

As you make your cash flow forecast, estimate how much your business spends. Costs tend to be both variable and fixed; however, you have to do the best you can. Fixed costs include rent and employee payments while variable costs are associated with the sale of your service or product. To help you estimate a number of the variable costs you have to reference back to your projected sales and use the services of a good accountant fort collins.


Contact O’Dell & Company for best CPA in Fort Collins-

Company Name: O’Dell & Company


Phone: 970-229-0018

Address:736 Whalers Way F-101

City: Fort Collins

State: Colorado

Country: United States