cash flow Archives | Numbers Knowhow

Navigating Cash Flow Challenges In The Arts: A Step-by-Step Guide

Mahmood Reza — Tue, 21 Nov 2023 09:13:34 +0000

Arts and creative organisations may be at higher risk of running into cash flow challenges than other businesses. It’s common in the creative industry to be at the mercy of unpredictable and volatile income streams. Many creative businesses work on a project basis with little opportunity for retainer contracts which bring predictable and sustainable income each month. That’s why it’s even more important to stay on top of your business finances. Try to identify cash flow challenges as early as possible. Here’s a step-by-step guide to managing financial and cash flow challenges: Assess your financial position Identify common cash flow issues Implement cash flow strategies Create a budget Create a ‘rainy-day’ fund Use financial tools Monitor and adjust Get expert support Assessing your financial position Before you can take steps to mitigate any cash flow challenges, you need to understand your current financial position. This means looking carefully at your profit & loss statement, your balance sheet and, crucially, your cash flow forecast. Identify your various income sources and revenue streams. You should know how much of your income comes from which clients and how those clients were sourced. Next, look at your fixed and variable expenses so you […]

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Why Cash Is Important For Business

Mahmood Reza — Tue, 07 Feb 2023 11:29:50 +0000

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Why Is Cash Flow Planning For Business Important?

Mahmood Reza — Thu, 07 Jul 2022 21:46:27 +0000

Cash flow forecasts or cash flow planning for startup businesses, for example, has to do with estimating or forecasting your likely future sales and expenses. But why is cash flow for business important? Well, cash flow planning, no matter what kind of business you’re running, is an absolutely vital business tool as it indicates whether you have enough cash to sustain your business and grow it. Even a simple cash flow forecast template in Excel can easily show whether more cash is going out of the business than coming into it. Why Is Cash Flow Planning for Business important? Using the example above, a cash flow forecast allows businesses to track the estimated or expected cash movements over a specific timeframe in the future. However, it pays to understand that a business’s profit at any given month end is not a true reflection of how much money is coming into it as revenue. How do you get a proper cash flow forecast. Well, use paper, spreadsheet or have your accountant it for you!. Using Numbers Know How makes it possible to estimate the amount of ‘money in hand’ you have at any moment in time. Similarly, if you take into […]

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