Cash Flow Made Easy

Nick Roberts 


One of the biggest challenges in business right now is having enough cash to pay the bills. So what can you do?
  • Know how much cash you have today, how much you will have tomorrow and next week/month as well. You cannot make business decisions without knowing exactly how much cash you have.

  • Don't manage cash from your bank balance, manage from your "cash" balance, your true spending power after all pending payments have cleared.

  • Better still; determine your real spending power after adjusting for known outgoings and any definite receipts within the period under review. Now you are forecasting your cash position.

  • All these are easy when you have proper systems or accounting software in place, the latter being so affordable these days. I find that 90% of business owners can cope with accounting software these days, despite what their accountants tell them!

  • Know what your cash position will be in six months or a year from now. If you really can't forecast your cash receipts, turn it around the other way by working out your outgoings over the next six months or year, then calculate how much you need to receive from your customers, not forgetting your drawings! If the amount you need looks impossible, at least you can panic now. If the amount you need is short but not too bad, you now have the time to do something about it.

Next month I'll cover some things to do to actually generate some cash. Until then, keep warm!

If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail or use "Contact Us" on The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.