Cash Flows and Budgets

Cash Flow

 

Finances matter!

Every business from the smallest sole trader to the largest company will have to keep track of its finances, otherwise there can be dire consequences such as being sued for a debt, being made bankrupt or going into liquidation.

Most of these consequences are preventable with careful planning and management of your money.

 

Be in Control!

All businesses start with a great idea, which it is hoped will be successful and generate income. There will also be a budget of how much money there is to spend getting it started, and what it is to be spent on.  The difference between the expected income and the budget for expenses will hopefully be a profit and this forms the target for the business’ success. Once a business is established, it is important not to lose sight of the target. Being in firm control of the amounts received and paid are key to ensuring that the worst doesn’t happen.

 

Budgets/Cashflows/Forecasts/Management accounts!

 

By whatever name you prefer, budgets, cashflow forecasts, and management accounts are all tools to ensure that a business maintains control over its finances.

At Rightway Accounting we can assist the proprietors of the business to prepare a budget or forecast. This can then be submitted to a bank to obtain an account or overdraft and will be useful  to set the business’s targets. This can cover any period of time from one year to five years or more. Once this is drafted, it should be reviewed regularly and adjusted to ensure that the estimates and circumstances still apply, and any changes reflected  in the figures to ensure that the business targets are still achievable.

Once the business is established we can take the company’s records and produce Management Accounts on a monthly or quarterly basis to compare to the budget and check to see if the company is on track. This can then be used as the basis for making management decisions about what is doing well and what is not, and the strategy adjusted accordingly.

Size isn't everything

 

Size isn’t everything!

 

It doesn’t matter how big your business is, preparing a budget and evaluation of results are valuable business tools. It is also important to budget for any tax liabilities, which are so often overlooked in calculations. Many businesses trade happily for a year, and then realise they have forgotten to set any money aside to pay the tax man.

Don’t let that happen to you!

 

 

 

 

For a further discussion about how to prepare budgets, forecasts and management accounts and how much this would cost, contact us.
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