We really did have to run a daily cashflow forecast for a business.
The business was in its infancy, maybe a couple of years old. It’s main expenses were people and premises and its revenue came from the delivery of consultancy projects.
The costs were pretty consistent but the projects were lumpy, some didn’t finish when they should and some of the clients took their own sweet time over payment of invoices.
There was an overdraft facility and it was well-used.
And it was about to be breached!
So we built a simple Excel cashflow forecast in which each column was a day. We only needed it to run for two months in to the future.
Some outgoings we knew would happen on specific days – paying the staff, the PAYE/NI payment, lease direct debits and rent.
Some outgoings we had greater control over – such as paying the overhead suppliers (including the very helpful accountants!)
And the “known unknown” was when clients would pay their invoices.
We knew when they should pay and we could see what the cashflow would like if the money came in when we expected it.
And we could see what the cashflow would look like if the money came in late – the day when the overdraft limit would be exceeded and by how much.
And we could see when the bank balance should come back to be within the overdraft limit.
It turned out OK.
We kept in touch with the bank (in those days banks had people you could talk to), current projects were completed and new projects were won.
The business emerged fighting-fit for the future.
But it could have been very different if the daily cashflow forecast wasn’t there to help navigate the business through a period of turbulence to a safe harbour.
The daily cashflow forecast episode was well over a decade ago. The business survived, flourished and is now a multi-million turnover, international management consultancy.
We do like a happy ending!
In today’s landscape we have plenty of apps but fewer bank managers.
But in similar circumstances I’d do the same again – build a simple daily cashflow forecast using Excel.
And keep it running until the danger has passed.
Cashflow an issue? Call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk and let’s have a free-of-charge chat about your business.
Michael – @bluedotmichael
Related links:
Do you have the right financial information to run and improve your business?
Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW
We don’t believe in forms, we believe in talking to people, finding out your needs and tailor-making a solution just for you.
Give us a ring on 020 7125 0270 or email us at info@bluedotconsulting.co.uk
“Just wanted to take this opportunity Michael to thank you for your support of our finance manager and myself in progressing this work. It really has moved forward more quickly than we had expected and the Finance and Risk committee on Tuesday evening were impressed with the progress.”
“Michael and the Blue Dot team have been an essential part of our journey from startup through to being an established company, and we look forward to continuing working together long into the future. They have always been on hand to offer support and sound advice whenever it is needed.”
“Blue Dot have been our accountants and bookkeepers since the very beginning of our business, and have been nothing short of outstanding throughout.”
“Blue Dot Consulting went above and beyond in helping us navigate not only the transition to cloud-based accounting but also in leading our accounts team through a broader period of transformation.
Their deep understanding of our unique needs and challenges was evident from the outset. They provided unwavering support to our team, ensuring they felt confident and well-prepared for the changes ahead.”
“Thank you again for your help and training so far – it’s honestly been invaluable.”
“I’m no expert but it has been transformative the help and advice I get from Michael and his team.
Michael was fantastic. He quizzed me on how my business worked financially and was super patient with me. Explaining everything in a non-accountancy manner. He then showed me how to utilise all the less obvious tools in the program, which he continues to do, so that I can see immediately what monies held belonged to my company and what is held for clients. I now do my own VAT returns and payroll because of his help and continued support.”
“I really enjoy working with Blue Dot Consulting — they’ve helped me take control of our financial situation in a practical, no-nonsense way.
They take a common-sense approach and, most importantly, they get things done. For example, we now have weekly planning and forecasting calls, along with monthly cash flow reviews using simple, easy-to-understand spreadsheets.
Their support has made a huge difference in how we manage and plan for the future.”
“As the business owner, it can get lonely making all the decisions. I feel I have a ‘silent FD’ that I can call, challenge and that any idea is OK to discuss, and to arrive at a sensible way forward.”
“Having someone in the room that is happy to (in a structured way) challenge the norm and not simply accept that, because things look good, we should stop looking to improve.”
“Blue Dot are uncompromisingly systematic and thorough so that you can get on with running your business.”
“Outstanding service and support. They get things done, just what you need. Recommended.”
“It was the genuine level of care and interest in what we do as a business.
The regular check-ins and the effort to ensure the systems they’ve implemented are working for everyone stood out.
It felt like more than just a service, it was a partnership.”
“I’ve been delighted with both the service and expert advice I’ve received from Michael and his team. They take the weight off my shoulders when it comes to my business’s financial requirements, allowing me to focus on building and managing the company.”
“We are a small organisation with no in-house financial expertise, so it’s a huge weight off my mind knowing that I can rely on Michael and his team to take care of everything.”
“I can wholeheartedly and highly recommend Michael and his team at Blue Dot as an exceptional accounting firm. They put my mind at rest knowing I am in excellent hands.”
“Michael and the team are my saviours. Always helpful, approachable and reliable. They show an interest in my business and give excellent advice and recommendations. Above all, they are highly likeable and fun to work with.”
“They went above and beyond in helping us navigate not only the transition to cloud-based accounting but also in leading our accounts team through a broader period of transformation.”
“You guys are brilliant. It’s been a challenging few weeks facing up to the issues but I do feel positive towards them now and I feel a weight has lifted from my shoulders. I am honestly so thankful!”
“I was a little apprehensive about working with a new accountant but I didn’t need to worry – I have found their approach to be friendly, genuine and they go above & beyond to help.”
“Michael’s straightforward, practical and tailor-made approach was perfect for me and our business.”
“Blue Dot have been our accountants and bookkeepers since the very beginning of our business, and have been nothing short of outstanding throughout.”
