‘Never Take Your Eyes Off The Cash Flow Because It Is The Lifeblood Of Business!’
– Sir Richard Branson
Truer words have not been said that emphasize the importance of the cash flow in a business so efficiently. Every wise business person would agree that happiness is a positive cash flow. Everything is better when your cash-in exceeds your cash-out. As per the International Financial Reporting Standards (IFRS), the movement of all cash and cash equivalent statements must be included in a firm’s cash flow statement. But what makes a strong, transparent cash flow statement so critical for running your business successfully.
There are various benefits of preparing a cash flow statement, starting with clearly defining the effective use of funds. Cash flows help a business to speed up collections, avoid unnecessary and early disbursements and to minimise idle balances. Additionally, a cash flow statement helps in minimising the operational cost as it leads to a routinized cash flow process and minimizing your time and involvement in mundane processes.
Cash flow has a significant impact on your business’s financial Plans. A defined cash flow helps in devising a comprehensive business plan for your business and structure the economic model too. Once you have your working capital figured out, you can accurately forecast your budgets and capital needs. Expert financial advisors and professional accountants largely rely on cashflow management for optimizing the cost of working capital and maintain inefficient use of your resources.
The sheer importance of cashflow budgeting makes it a process with significant complexities as the accuracy of the financial records is paramount in making correct estimations. As experienced tax and finance consultants we pay extra attention to the budgeting cash flows and planning for them as they can be of prime importance for efficient money management.
Our objective is to help you mitigate any future risks and gives you a tool to manage future financial requirements. So the next time you think of a seamless cash flow for business growth, think of us!