0410: How To Make 2021 Your Contracting Cash Flow Year

<h1 style="text-align: center;"><span style= "color: #0000ff;"><strong>This Podcast Is Episode Number 410, And It's About How To Make 2021 Your Contracting Cash Flow Year</strong></span></h1> <p><span data-preserver-spaces="true">Nobody wants their business to fail. Although it's impossible to predict the future with 100% accuracy, a cash flow forecast is a tool that will help you prepare for different possible scenarios in the future. </span></p> <p><strong><span data-preserver-spaces="true">What is Cash Flow Forecast?</span></strong></p> <p><span data-preserver-spaces="true">Cash flow forecasting is the process of estimating how much cash you'll have and ensuring you have a sufficient amount to meet your obligations. By focusing on the revenue you expect to generate and the expenses you need to pay, cash flow forecasting can help you better manage your working capital and plan for various positive or challenging scenarios.</span></p> <p><span data-preserver-spaces="true">A cash flow forecast comprises three key elements: beginning cash balance, cash inflows (e.g., cash sales, receivables collections), and cash outflows (e.g., expenses for utilities, rent, loan payments, payroll).</span></p> <div> <p><strong><span data-preserver-spaces="true">Building Out Cash Flow Scenario Models</span></strong></p> <p><span data-preserver-spaces="true">It's always good to create best-case, worst-case, and moderate financial scenarios. Through cash flow forecasting, you'll be able to see the impact of these three scenarios and implement a suitable course of action. You can use the models to predict what needs to happen, especially during difficult and uncertain times. </span></p> <p><span data-preserver-spaces="true">In situations where variables shift quickly, such as during a recession, reviewing and updating your cash flow forecasts regularly on a monthly or even weekly basis is highly recommended. By monitoring your cash flow forecast closely, you'll be able to identify warning signs such as declining revenue or increasing