I often find myself repeating that if you are not managing your cash flow, you are not managing your business.

I believe that cash really is King, so here are my two rules for running a business.

Wall with writing coming through saying rule number 1, focus on cash. Rule number 2, don't forget about rule 1!

So, it’s incredibly important for you, as a business owner, to understand where you are, where you’ve been, and where you’re going in terms of your cash.

Create a rolling weekly cash flow forecast

An effective way of focusing on cash is to create a rolling weekly cash flow forecast. This allows you to see your starting point, your receipts, your payments, and your net cash movement. Then run this forward for several weeks or even months.

By forecasting your cash flow, you can stay on top of your finances and have visibility into potential issues down the road, that you might not otherwise see.

Creating a rolling weekly cash flow forecast is as simple as 1, 2, 3!

  1. Start by looking at your opening balance, then
  2. Add your receipts, then
  3. Subtract your payments

That gets you to your net cash movement. Simple!

From there, you can forecast your closing balance for the next ten to thirteen weeks, or even further out. When you are forecasting, consider your existing aged debtors and creditors, as well as regular expenses like salaries, taxes, and direct debits.

I’d recommend reviewing and updating your forecast on a weekly basis. That allows you to stay on top of your cash flow and make smart and timely decisions for your business.

Download your blank template

To help you start, I’ve created a simple template you can use to kick things off (so you have no excuse not to do one).

Download it here.

Stay on top of your finances

Managing your cash flow effectively is crucial for the success of your business. By creating a rolling weekly cash flow forecast – and keeping it up-to-date – you can stay on top of your finances, have visibility into potential issues down the road and make better decisions.

Take control of your cash flow today and set your business up for success.

Want to know how well you’re managing your company’s finances? Try our free diagnostic tool to get your score!