Cash Flow Management

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Cash Flow Management & Modelling

What is Cash Flow Modelling?

Cash flow modelling is the process of tracking how much money is coming into and out of your business. This helps you predict how much money will be available to your business in the future. It also helps you identify how much money your business needs to cover debt and future expenses. In a time of economic downturn or financial distress it is the single most important tool available to you.

How do we do it?

There are two fundamental ways of performing a cash flow analysis – working from a forecast income statement and balance sheet or from a detailed analysis of the business’s cash flowing through its bank account/s. The risk of relying on the forecast approach is that there are many variables at play which can result in incorrect decisions being taken regarding the liquidity of the business; the timing of receipts from customers and market demand for products, to name a few. This timing difference can be disastrous and, from our experience, often is.

As a result, we have developed a cash flow modelling tool which enables us to increase the accuracy of forecasting to close to 90%. This is done through daily interrogative analysis of cash movement in the organisation and from this we gain an understanding of the ebb and flow of cash. This allows us to model a far more accurate picture of the future thereby allowing managers to make well-informed decisions on where and when to incur expenditure, be it cost of stock, expenses, or investment in assets.

Why EBT?

We employ our cash flow modelling tool as matter of course in all our business turnaround and rescue projects and, in some, it has proved to be the difference between success and failure. Several of our directors have worked in the financial markets, and all have started and run their own businesses. They, therefore, have a deep appreciation of the importance of cash in any business and can advise you from a background of personal experience.

Is this the right solution for you?

If your business is:

Experiencing cash flow challenges due to liquidity constraints.

Planning on raising growth capital.

Finding it difficult to accurately predict your cash need.

our cash flow modelling tool will make decision making a lot easier. Give us a call for a no-obligation high-level confidential discussion on how best to proceed.