Financial stability in any business revolves around cash flow. If you have low or negative cash flow, you’ll only remain solvent for a short period of time without outside funding. Statistically, 33% of businesses fail due to a lack of capital and even more fail because of a lack of cash flow.
If you begin running a 13 week cash flow forecast, you’ll have a better understanding of how your company will perform in the future.
Understanding the Importance of the 13-Week Cash Flow Projection
If you want to optimize your financial stability, you need to begin using quarterly forecasts.
What is a 13-Week Cash Flow Projection?
Cash flow forecasts can be for any period you like: day-to-day, ten days, 23 days – anything. The longer your forecast, the less reliable it will be. A 13-week cash flow forecast covers an entire quarter of the year and is ideal because it:
- Considers quarter-over-quarter cash flow
- Remains fairly accurate
- Allows for rapid, quarterly decision-making
Why would you use one of these forecasts? They offer many benefits.
Benefits of Implementing a 13-Week Cash Flow Projection
Forecasts with different timespans are also beneficial, but the 13-week time period is extremely beneficial because it:
- Remains short-term and fairly accurate
- Identifies cash shortage potentials well in advance
- Provides accurate data that you can use to make strategic decisions
- Builds confidence if trying to land financing or investors
If you could shed light on what your sales, revenue and cash flow would be over the next quarter, how would it help your business? Making informed decisions based on data allows you to minimize risks and make smarter choices when growing your company.
Creating a Comprehensive 13-Week Cash Flow Projection
Cash Flow Frog will help you create a comprehensive projection by:
Gathering and Analyzing Financial Data
A 13 week cash flow relies on your financial data. We'll gather key data from your accounting platform, such as debits and credits. We'll gather and analyze data to better:
- Create revenue forecasts
- Create expense forecasts
We'll use historical data and current trends to improve forecasting accuracy.
Building Assumptions and Scenarios
Scenarios help us create better forecasts because there will always be some level of inaccuracy in every forecast. We help combat these inaccuracies by creating:
- Best-case scenarios
- Worst-case scenarios
- Moderate scenarios
By incorporating economic changes, seasonality and market trends, it’s possible to create your quarterly forecast with much greater accuracy.
Managing Cash Inflows and Outflows
Finally, we’ll manage your cash inflows and outflows. Your forecast must consider:
- Accounts payable
- Accounts receivable
Forecasting empowers you to know where cash is coming into the company and where you’re not being paid quickly enough. Insights will allow you to better understand how your inventory turnover has an impact on cash flow.
What can you do with this data?
Use it to optimize your working capital and manage liquidity. For example, you may automate your invoices to be able to increase cash inflows.
Using Cash Flow Frog for Seamless 13-Week Cash Flow Management
Cash flow management doesn’t have to be time-consuming and tedious. With a tool like Cash Flow Frog, you can create a 13-week cash flow projection quickly and automatically.
Introducing Cash Flow Frog's Tools and Features
Cash Flow Frog is a cloud-based cash flow management tool that helps businesses with:
- Cash flow forecasting and projections
- Comparing planned vs actual results
- Scenario planning
- Creating cash flow statements
- Customer insights
- VAT/GST forecasting
- Consolidating entities
- More
The platform’s user-friendly interface makes it easy to input financial data and start using the tool right away.
Cash Flow Frog syncs with your accounting software and can integrate with other tools in your tech stack to automate the forecasting process and improve its accuracy.
Businesses enjoy real-time tracking and automated updates to create the most accurate projections.
Customizing the 13-Week Cash Flow Projection
If your goal is to create financial stability within your organization, Cash Flow Frog can help by allowing you to create a custom 13-week cash flow projection.
Every projection created with Cash Flow Frog can be tailored to meet your business’s unique needs and structure. The tool allows you to:
- Incorporate metrics and variables that are specific to your industry.
- Integrate multiple accounts to generate a comprehensive view.
Collaborative Capabilities and Reporting
Cash Flow Frog allows for team collaboration when creating cash flow projections, helping ensure that your business is using the most accurate figures from all departments.
Along with collaborative tools, Cash Flow Frog also makes it easy to generate reports for:
- Lenders
- Stakeholders
- Investors
Data can easily be exported, allowing it to be presented and further analyzed.
Making Informed Decisions for Financial Stability
With 13-week forecasting and scenario planning, you can make smarter, more informed decisions to ensure the financial stability of your business.
Here’s how:
Interpreting and Acting on the Projection Insights
Financial data analysis is just one piece of the puzzle. Along with interpreting your projection insights, you need to act on them.
Use your data to:
- Identify potential cash bottlenecks and enact strategies to help circumvent them.
- Identify potential surplus periods and have a plan to invest to make that surplus grow.
- Adjust your spending and investing plans to ensure you’re always moving towards your goals.
By making strategic decisions based on your projection data, you take an important step toward ensuring the financial stability of your business.
Maintaining Long-Term Financial Health
In addition to improving the management of your cash inflows and outflows, you can help maintain the long-term financial health of your business by integrating your 13-week cash flow forecast into your long-term financial planning strategy.
Take a careful look at your historical projection data to analyze trends and continually improve based on this data.
Additionally, make sure that you’re regularly optimizing your projection process to improve its accuracy.
Conclusion
Optimizing the financial stability of your business will help ensure that you can continue operating over the long term. Use the guide above to make the most of your 13-week forecasts and make smarter, data-backed decisions based on their outcomes.
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