Why Coveted Financial recommends a 13-week cash flow projection
A 13-week rolling projection is a powerful planning tool for business owners and financial managers. Why 13 weeks? We believe a close analysis of the next quarter best accommodates seasonality and long-term strategy, but is still short enough to remain firmly in the realm of accurate forecasting.
A projection takes time to set up and maintain, but the enhanced visibility is like adding a GPS to your journey. Without one, you have a general idea of where you are going, but with a GPS, you can avoid traffic jams, dodge accidents, and choose between routes based on your plans and preferences.
13 weeks provides enough foresight to enable a controller to advise the owner or CEO when cash management needs to be adjusted to stop losses or make strategic investments. For example, when the forecast warns of a dip in sales, a surge in inventory, or a key customer who will miss payments, the financial team has time to adjust internal spending or bank funding, before a problem arrives.
Beyond its value as an in-house planning tool, the 13-week forecast assures financial partners that the health of the business is being closely monitored. Frequent touches based on strong data will give your lenders and investors higher confidence, which translates into closer cooperation -- and better terms.
What is the best way to set up a 13-week forecast? While there are standard templates or software available, this is one place where an expert guide can add tremendous value. Coveted Financial Services has decades of experience with cash flow analysis, and more importantly, with banking industry expectations across a wide variety of industries, specifically in the greater Chicago market.
Navigating this process with clients large and small, Coveted has learned that “one-size-fits-all” is definitely not the right approach to cash flow analysis, and its relationship to bank interactions. Retail is very different from manufacturing. Companies with level loaded revenues are very different from seasonal businesses, or those who collect only periodically on government contracts.
Coveted Financial begins by getting to know you and your business. We learn your objectives, for the near future and the long term. Along with our broad knowledge of cash analysis, we use the unique characteristics of your business to design a dashboard providing both monitoring and true insight.
Once you are up and running, we work with you to establish the effective use of cash projection in your accounting calendar. We can help you keep data updated and analyzed as the projection rolls forward, and when needed, we can assist you with formatting the projection for your banking partners.
For more information on the many ways Coveted Financial can bring new value to your business, schedule your free consultation today!