Cash Flow and Cash Flow Forecasting strategies for Covid-19

Key tasks to manage your Cash Flow

Healthy cash flow is essential for the future of the Business. Here are some key tasks that you need to do to help you with making sure that your cash flow is healthy:

1. Communicate with your Bank or Loan Providers
2. Review your Operational Expenses & Revenues
3. Analyse and review Payment Terms with Suppliers and Customers
4. Make sure finance tools and systems are working to their optimum
5. Cash Flow Forecasting needs to be robust and efficient but above all accurate

The Importance of Cash Flow

It is important to be aware that cash flow reflects the amount of money coming in or going out of a business; investments and daily financial activities must be balanced to keep the company afloat.

Cash shortages will hamper operations and hinder growth – it is important for owners not to make short-sighted decisions that can hurt the business in the long term.

Cash Flow Management

Cash Flow Management is an essential and an integral part of business and financial activities and the need to maximize the use of software tools which give a broader, real-time assessment of a company’s financial situation, during the Covid 19 epidemic this is never more important.

A company’s Cash Flow Statement often provides analysis and underlines an important gap between the revenue of sales from customers and payments out to suppliers.

A company’s Cash Flow Statement will also provide an insight into the need forecasting and can help to highlight the need for action, especially with the Government introduced schemes. This can be a key part of the decision to take part in the furlough scheme or talking to banks regarding lending.

Cash Flow Tools in Business Central and Dynamics NAV

Microsoft Dynamics 365 Business Central (formerly NAV and Navision) has a range of cash flow tools to manage different cash flow sources:

1. Receivables – What is owed to you and when due
2. Payables – What you owe to your Suppliers and when due
3. Liquid Funds – Cash in Bank, Investments
4. Manual Expenses & Revenues – Money not going through the systems such as investments or PAYE
5. Open Transactions – Purchase Orders, Sales Orders & Work in Progress
6. Fixed Assets – Acquisitions / Disposals
7. Service Orders – revenue
8. G/L Budgets
9. Job Budgets
10. VAT

Cash Flow Forecasting

Cash Flow Forecasting is a calculation based on a number of intelligent assumptions and will enable the calculation of future cash flow. This,  in turn, will give you confidence in the future of your business and enable you to make more informed decisions and create better planning for your company. The tools in Business Central are extremely flexible, allowing you to create multiple forecasts to allow for different scenarios.

Based on the information provided and your own personal set-up, you now have a powerful tool to enable precise and accurate forecasting. This will enable the generation of many different facets of accurate Cash Flow Forecasting, including manual revenues and forecast statistics, with fully detailed reports. Handy charts can be created and you are able to drill down into the data to look into the different areas of the business.

Business Central Cash Flow Training

We have found that many businesses do not utilise the full capability of cash flow in Business Central or Dynamics NAV. Our expert consultants can provide in-depth 1-to-1 training via an online meeting to help you get set up and utilising the tools to make sure your business has a healthy cash flow in less than a day.

Contact us to discuss your requirements

The New Business Normal

This article is part of a series that we are calling "The New Business Normal", where we talk about everything that effects businesses following the outbreak of COVID-19.

See The New Business Normal