
What is a cloud accountant?
The term cloud accountant is used quite a bit these days. But what does it actually mean? We cut through the jargon and explain the benefits.
As the United Kingdom enters possibly the deepest recession for a generation you, like most small business owners, are grappling with do’s and don’ts of how to manage your company’s cash flow through a downturn. Our Co-founder and CFO, Jon, shares top tips on how to do a cash flow forecast.
‘You do not get great sailors in calm waters’! The financial storm of covid-19 rages on and the uncertainty your business is encountering will often feel insurmountable. The pressures on your time, energy, and emotion as a small business owner will test your resilience to its limits.
Today is the time to embrace the challenge and ensure you are on top of your company’s cash flow.
Cash flow planning has become a regular exercise for the majority of business owners. This enhanced scrutiny and use of cash flow forecasting software might be a new way of working for you. To help you out, here are a few tips to help you forecast your business’s cash flow and develop a process for the long term.
Your first ‘must do’ is to understand the one priority that will keep your business afloat. Cash today!!!
Have you got enough cash to cover your operating costs? Can you pay your team? Is your next tax bill covered? Are the payment terms of your key suppliers achievable?
The goodwill of key stakeholders will be lost quickly if you can’t pay on time and that will add to your stresses downstream.
To keep your business on the right track going forward, you should continue to be on the pulse of your business’s cash flow every day. The correct financial processes and cloud accounting technology will give you this up to date insight. This is key if you’re to get a clear view of your business’s cash flow
To do this you need to make sure you’re capturing the right financial data in Xero.
There are lots of tools available that capture all the information you need – from bank transactions to expenses and more.
Once you’re capturing all the right data in Xero, you’re in a great position to track your cash flow and build a robust buffer against unforeseen bumps.
To forecast you must have sight of, and challenge, the value of every cost.
There are a couple of simple tools to help you do this. One is in Xero and the other is using an app called Float. Both aim to give you the visibility and insights into cash today and tomorrow:
Once revenue targets and costs have been challenged you will understand the cash gap and can begin to work creatively to bridge it.
Focus your forecasts around finding new ways to solve problems that your existing customers, team and suppliers are experiencing. This is the hallmark of a smart small business owner!
You should also be aware of what is available to you in terms of government assistance, grants, business lending, and tax reliefs (like R&D). Knowledge like this could be your lifeline.
Historically cash flow was something that businesses viewed a few times a year. But now there are dynamic tools that enable real-time and on-demand insights to help you create a sustainable business.
Float – we have mentioned and is a cash flow forecasting and management app that gives businesses a real-time view of cash flow. This enables you to plan for the what-ifs and make more confident decisions about the future.
Blu Prints – helps your business to go a step further and understand key financial metrics, manage cash flow and make informed decisions for your business. think of this as a board level view linked to your future strategic plans.
As circumstances continue to change, we recommend you review your cash flow forecast regularly. For example, if a new lockdown procedure affects how a supplier will get stock to you, this will need to be reflected in your cash flow forecast and profit and loss reports.
To ensure that these steps become part of your routine, set aside a few hours every week to go over any relevant updates.
We’re here to help. If you need a friendly chat with someone who’s experienced in cash flow forecasting, please just get in touch with us at info@blusky.co.uk.
The term cloud accountant is used quite a bit these days. But what does it actually mean? We cut through the jargon and explain the benefits.
As many business owners grapple with the challenges that a recession brings, we share our top tips on how to do a cash flow forecast.
The government announcement this week has pretty much pressed the reset button on the Coronavirus Job Retention Scheme. Here's the lowdown.