13-Week Cash Forecasts

13-Week Cash Forecasts

Cash is the life blood of any business. Without cash, business activities quickly grind to a painful halt. Predicting and managing short term cash flows are absolutely critical treasury functions for all businesses, regardless of size.

Creating a 13-Week cash flow model disciplines a company's management team to account for all sources and uses of cash over the next three month period. Information is generally summarized on a weekly basis, but in critical situations, can easily be adapted to a daily model. RMA can effectively assist client's develop cash forecasts and help incorporate this information into management's decision making methodology.

Working with a schedule matching forecasted receipts and disbursements educates a management team not only to the importance of bringing in cash, but also to the relationship between cash collections and the company's ability to meet cash outflows; such as payments for payroll, suppliers, transportation, advertising, and other expenses.

The creation and maintenance of a 13-Week cash flow model is especially critical to an organization enduring financial hardship. However, this same tool, which allows a management team to navigate through difficult times, can be equally beneficial when the cash crisis passes.