Improve Your Cashflow with these 7 Top Tips

It’s like giving yourself a crystal ball to look into – understanding how your business will perform in the future.

A decent cashflow forecast will put your business in the best position. You’ll be able to mitigate potential risks and you’ll begin to understand if your business is in a position to begin to grow.

We’ve discussed cashflow in previous posts, and how important it is to the financial health of your company. You can look at these here and here. Managing your cashflow is essential for good business practice and vital to make accurate predictions.

In this blog Holistic Finance Group will take you through the seven best ways to make your cashflow forecast more precise. As always, if you’d rather get expert eyes to look through your planning and cashflow, then please get in touch with us for a no obligation chat through your requirements.

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We’ve listed the main components to a cashflow forecast below and where we think your focus should be for each point.

1. Estimate future sales

A crucial element for planning, how much you’re going to sell. In order to make this as accurate as possible we advise that you go through the following:

  • The size of your total market and what your current market share is.
  • The resources you have, and what you’ll possibly need.
  • Your competition, how is your marketplace? What are you competitively doing at the moment, how will the market share be divided in the next 12 months?
  • Pricing; what do each of your product and services cost? Is this realistic given your target market?

2. Create a profit and loss forecast

There are four parts to this forecast; you’ll need to be as accurate as possible when it comes to completing this to give yourself the best detail to move forward with. Once these are completed you’ll have a good idea of what your gross, operating and net profits are.

  • Expected revenue from your sales and the cost of production / cost of goods.
  • Outgoing costs; your day to day operating costs, all the costs it takes to run your business, rent, taxes, salaries and depreciation etc.
  • Taxes and profit; it’s important to work out what you think your potential profit will be before tax, then you can estimate the amount of tax you’re likely to pay, it’s a good idea to look at your historical payments to work out what it’s likely to be.
  • Dividends and retained surplus; sounds like a mouthful but it’s basically about how you’re going to allocate your profits.

3. Make monthly sales estimates

When you’re making your projections it’s handy to use monthly figures as often there’s not enough detail weekly.

Take into consideration any known delayed payments you might have.

4. Payments due

These are the payments that aren’t necessarily forecasted in your profit and loss. The ones that definitely need to be paid, but just not yet, for example:

  • VAT taxes
  • Interest on any loans you might have
  • Utility bills
  • PAYE taxes

5. Be realistic

Make sure your estimation and expectations are realistic (think back to point 1 where you need to know the size of the market and what your share of that space is).

Keep checking your forecasts against current cashflow statements, make sure they’re inline with each other and, if not adjust them. If you’re getting large discrepancies then there might be a missing variable somewhere, it’s good to double check.

6. Be consistent

This isn’t a one-time activity, once you’ve created your cashflow forecast you need to keep checking it against your actual figures. Note any changes and update it as soon as you have any information which is true.

The more you forecast and adapt the more you will be able to predict trend in the future and unravel what might happen come next month / year.

7. Account for variable costs

There will always be fluctuations in expenses and costs, try to consider these seasonal trends and account accordingly for them.


We all know that accurate data will lead to accurate forecasting. The more information you have the better it will be. Here we’ve run through all the elements that you need to be keeping track of monthly, and updating as and when you have more information.

This past year has taught us all that predicting for every event is impossible, but we should all be putting our businesses in the best possible position should anything ever happen.

If any of this sounds daunting, then please get in touch with us, it’s always best to have this basic level of information available and ready to go, so if you need any help with it just ask.


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