How to Create and Analyze Your Cash Flow Forecast

Managing your cash flow seems easy. That is, until you start the task. You’re not sure where to start, how to make sure you have enough money for Screen Shot 2015-07-30 at 12.06.32 PMnecessities, or how to use any EXTRA money or even find it.  If you create a cash flow forecast, and analyze what you find, all of the questions you’ve asked yourself can be answered without stress or confusion. Fundbox.com offers a list of helpful tips on creating an analyzing “a cash flow projection that gives you a clear look at when money comes in, when it goes out, and what money you are left with after you have paid your expenses.”

1. Start with Incoming Cash

Cash flow forecasting begins with your sales forecast. “All you can make is assumptions at this point, although taking a look at trends from the past 12 months can help predict patterns.”

2. Tackle your Outgoings

Determine every expense for the month.

3. Don’t Forget Inventory

“Ideally, inventory purchases are made when the sales pipeline calls for it (& with your cash flow situation in mind).”

4. Use Accounting Software or Pre-Baked Templates

5. Analyze your Findings

“If your cash flow looks like it might be negative down the road, you’ll need to come up with a plan.”

Cash Flow forecasting can help you plan for all kinds of financial obstacles and purchases, as well as aid your decision making.

Manage Visual Analytics Effectively

Business Intelligence has changed the way of the business world and opens a new window to data analytics. Your entire organization becomes profitable, in time and in those dollar signs you are always wishing for but can never quite grasp. This article from TDWIdata_visualization[1] explains just how beneficial Visual Analytics, and its versatility, are for a business, but it also reminds us that Visual Analytics can quickly lead you down a messy path if it is not properly managed.

David Stodder gained perspective through his research (study of spreadsheet use, an interview with the director of data warehousing for Helzberg Diamonds, an interview with the director of pricing at Watts Water Technologies, & more) for this article, and his new viewpoints on Visual Analytics is worth sharing.

Visual Analytics tools allows users to work in a self-service environment with less reliance on IT for every question, dashboard, report, etc. Users have more power, and in most cases, this means users can move your organization closer to its final goals. But with this power, comes the ability to mismanage.

If growth in the use of visual analytics tools and applications is not managed carefully, it could also exacerbate the very difficulties that enterprise BI rollouts were intended to solve.

Through his research, Stodder found one consistency that matches 9Dots’ findings and opinions–start eliminating spreadsheet use. Through dashboard and analytics tools’ versatility, there are a variety of ways you can take this first step, but moving out of heavy spreadsheet use means more easily managed data and less confusion and stress in your work days.

The best course is to pursue “managed” or “governed” self-service that features good communication and division of responsibilities. A best practice is to establish a governance or center of excellence committee to support growth in self-service visual analytics. In this way, enabling “the masses” to be more data-driven in their daily strategic and operational decision making can be a realistic goal.

The key BI objective that Stodder has found through his many inquiries into well-run, profitable companies, is one that is consistent with our blog posts: “improving operational efficiency and performance through better information flow.” With visual analytics tools, users are offered a new set of tools that meets this objective AND it’s no more challenging to use. We understand that change can lead some of us into a frenzy, but it’s no better than the frenzy your already dealing with in your day-to-day. As long as the tools are managed and deployed correctly and your organization is comfortable with how to use it, they will push forward into new data environments AND improve your business.

Shifting Gears: Moving from Reactive to Proactive Enterprise Planning

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“If you can’t put a halt to revenue and profit surprises, the earnest planning, process development, and resource & planning technology investments that go into your major corporate initiatives could be wasted. Those outcomes can be especially painful given the unpredictable economy. Effective use of your time and resources is essential in growing your business.”

9Dots’ white paper, Shifting Gears: Moving from Reactive to Proactive Enterprise Planning, is all about how best to eliminate feeling surprised by profit surprises. Through reading this you will learn how to make the most effective decision for your organization. We are aware of the challenges and demands you may face in a business environment that is characterized by uncertainty, and we made it our goal to shift your feelings from uncertainty to efficiency.

Today, leading organizations are tackling challenges by developing:

– A rapid response to change

– A holistic view of key business functions created by understanding and modeling the interdependencies of business drivers that span multiple functions

– Timely visibility of performance gaps

– Insight into new objectives, performance targets and contingency plans that can make an impact.

Read more to learn how to become one in the same with these accomplished and profitable businesses.

The 10 Must-Follow Cash Flow Rules

cashflowEveryone knows you have to properly manage the cash flow of your business to reap the benefits and rewards. But sometimes, it can be easier said than done. Instead of worrying about making the best decision and constantly “fighting the cash flow fires,” you should be using the unique ideas you have to advance your business to eliminate the possibility of a fire at all.

Inc.’s 10 Absolutely Must-Follow Cash Flow Rules are 10 rules for less worry, doubt or concern about your organization. Implement them immediately to manage the way you do business to the best of your ability.

1. Never run out of Cash: Commit with your all to the work it takes to ensure this doesn’t happen to you.

2. Cash is King: Cash is what keeps your business alive. Give it the attention it deserves.

3. Know the Cash Balance right now: With inaccurate information, even the most experienced of people could make a business decision that impacts negatively.

4. Do Today’s Work Today.

5. Either You do the Work or Have Someone Else Do it.  You just have to get the work done, so those are the only choices you have.

6. Don’t Manage from the Bank Balance: You reconcile your bank balance. You don’t manage from it.

7. Know What you Expect the Cash Balance to be Six Months from Now: This answers the question: do you manage your business, or does your business manage you? Use the necessary tools to forecast out this information and take advantage.

8. Cash Flow Problems Don’t “Just Happen”: Always know the answer to #7. You would be surprised at how many failed-business owners had no idea there was a cash flow problem in time to fix it.

9. You Absolutely, Positively, Must have Cash Flow Projections: They answer all of the important questions from the above rules.

10. Eliminate Your Cash Flow Worries!: Be free to do what you do best– take care of customers and make more money. Efficiency is the real key to success in business. You don’t want to be worrying about cash flow and ignoring what you should spend the most time on. Always focus on making your business better and use your talents to do what you are best at.