Starting points: A run through of regular payments (10 min)
A run through of all the regular payments and income the business has.
- A good place to start is direct debits and standing orders.
- This can be ideally considered monthly, but also done on a weekly and quarterly basis.
- Don’t forget things like loan repayments or tax liabilities.
- As you’re repeating this monthly or quarterly – what has changed, or is likely to be changing?
Modelling payroll (5 min)
In a spreadsheet – List out all your employees and their monthly cash payout.
- To start with this total can be added to Float as one monthly figure.
- Then work to establish any payroll taxes due – enter this figure to Float on the date expected to be paid.
Income, marketing costs and cost of sales (10 min)
On a spreadsheet or piece of paper work to establish any regular income and planned or expected income.
- For regular reliable recurring income. Input this as a budget in the sales category (or whatever category it will be reconciled in).
- For any project based revenue, this can be added in the projects section, along with any respective associated costs (eg Freelance costs, equipment hire, or other cost of sales)
Make sure your accounting software is reconciled up and up to date (5 min)
- Where possible – make sure all significant bank transactions are reconciled and up to date.
- Make sure to include any invoices or bill payments. Hit ‘sync’ in Float to pull in any changes.
Look back over the months to compare budget to actual spend (5 min)
By tapping on the month table header in Float, you’ll be able to compare your budget vs actuals in the current or previous months.
- Look at any discrepancies here.
- If under budget – will future budgets need to be adjusted to consider timing of spend?
- If over budget – do future budgets need to be adjusted to make our budgets more realistic?
- The insights reports section in Float can also be used to highlight areas where there are the most discrepancies.
Credit control – and updating expected due dates on invoices and bills (5 min)
In the invoices and bills tab in Float, review any outstanding invoices and bills and enter in any new more realistic expected payment dates.
- If invoices will be paid in instalments multiple payment dates can be set. This is particularly important for any dates that are set to be paid in the past.
- These must be set to dates in the future, to establish a realistic cashflow projection.
Scenario planning (10 min)
- To create a new “what if” scenario such as ‘taking on more staff’ or ‘increasing our marketing budget’.
- This can be created by choosing a new scenario, and simply changing the desired categories. Simply add (or subtract) the new amounts to explore the impact.
- When you return to view the base scenario – any changes made to the base scenario will also be reflected in the new scenario layer.
- At the next meeting – any changes in the scenario layer that become finalised can be easily merged down to the base layer.
Decisions (10 min)
- Ask your client, how confident they feel about the cashflow they have projected.
- Consider the ‘days to zero cash’. If this is too short maybe a loan or overdraft facility could be considered as an action point.
- Explore any key invoices that must be paid for the cashflow to hold true, and establish some dates to revisit if this is not the case.
- If the cash position is strong – consider what opportunities this might bring to invest in the business or take some cash out of the business.
- Discuss what level of cash safety net is appropriate. If cash is set aside in any bank accounts for savings which is not to be considered this can be removed from the cashflow in the bank account settings.
- Agree a date to revisit the cashflow and review the budgets and credit control process.
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Cashflow management, forecasting and scenario planning agenda template summary
For anyone who wants to help put cashflow on the agenda.