CASH FLOW MANAGEMENT

Prepare cash flow projections for next year, next quarter and, if you’re on shaky ground, next week. An accurate cash flow projection can alert you to trouble well before it strikes. It is for this reason we bring accounting and bookkeeping services to you.

Understand that cash flow plans are not glimpses into the future. They’re educated guesses that balance a number of factors including your customers’ payment histories, your own thoroughness at identifying upcoming expenditures, and your vendors’ patience. Watch out for assuming without justification that receivables will continue coming in at the same rate they have recently been, or that payables can be extended as far as they have in the past. So much so, you need to be sure about the inclusion of expenses such as capital improvements, loan interest and principal payments and seasonal sales fluctuations.

We help you start your cash flow projection by adding cash on hand at the beginning of the period with other cash to be received from various sources (after thorough research). In the process, you will wind up gathering information from salespeople, service representatives, collections, credit workers and your finance department. Whatsoever, you’ll be asking the same question: how much cash in the form of customer payments, interest earnings, service fees, partial collections of bad debts, and other sources are we going to get in, and when?

The second part of making accurate cash flow projections is detailed knowledge of amounts and dates of upcoming cash outlays. That means not only knowing when each penny will be spent, but on what. We help you have a line item on your projection for every significant outlay, including rent, inventory (when purchased for cash), salaries and wages, sales and other taxes withheld or payable, benefits paid, equipment purchased for cash, professional fees, utilities, office supplies, debt payments, advertising, vehicle and equipment maintenance and fuel, and cash dividends.

“As difficult as it is for a business owner to prepare projections, it’s one of the most important things one can do,” says accountant Steve Mayer. “Projections rank next to business plans and mission statements among things a business must do to plan for the future.” And this is why when you need accounting services outsourcing, Escrow Consulting Group is the answer.