• New Wave Accountants

5 Helpful Financial Tips to Help You Oversee Your Cash Flow

A company’s flow of money from sales and other sources is referred to as cash flow. The money gained from profits is the most common source of cash flow.

Money can come from surpluses, grants, loans, refunds, and the sale of assets that are not essential to the business. Cash flow forecasts help companies avoid running out of cash, and they can also help boost profits.

Here are some tips from tax accountants on how to help you predict the direction of your cash flow.

1) Choose a Time Frame for the Forecast

Cash flow is a dynamic concept, and the time frame for predicting it can vary over the course of a business process. The time frame can be short term, medium term, or long term. The shorter the time frame, the more precision you can expect, and the less time you will have to review the results.

Longer time frames can be expressed in quarters, which are usually three-month periods, or annually. Short-term forecasts are made for the immediate future, and they can be useful for budgeting purposes.

Medium-term forecasts are usually made to predict the business’ cash flow for the next year, while long-term forecasts are used to predict the cash flow for years after the first one.

2) Get an Estimate of Cash Inflows

Cash inflows are potential inflows of cash for a company. They are made up of revenues and government payments. These are the funds that come into a business from its normal course of operations.

A short-term cash forecast can be based on sales within the next year, while a long-term forecast can be based on an estimation of sales that the business can collect over a period of three or more years. These inflows are the funds that are used to make payments.

3) Get an Estimate of Cash Outflows

Cash outflows are actual payments that are made to creditors and to other parties. They are made up of operating expenses, tax payments, and payments for interest, debt payments, and the cost of goods sold or purchase of goods.

These are the funds that are used to make payments.

4) Gather All Your Estimates

Cash expenditures are made in the short-term, and they are flexible, depending on the needs of the business. These expenditures include wages, supplies, and lease payments.

Cash expenditures can be estimated based on the amount the business has spent in the past on these items, or they can be estimated based on how much is expected to be spent in the future. Forecasting these types of cash flows can be tricky, and it can even require calculations by a professional accountant.

5) Compare Estimates to the Actual

Cash flow forecasts can be very helpful in business planning. Cash forecasts can help business owners make decisions based on the cash that is expected to be collected and how it will be allocated.

Forecasts are used to make estimates of what could be collected in revenue, and forecasts are also used to estimate how much will be paid out in expenses, taxes and other payments.


Cash flow affects a business's ability to operate, as well as its ability to operate profitably. Understanding your cash flow will give you a better picture of your business, and it will help you make more informed management decisions.

Get a better perspective of your cash flow with New Wave Accounting. We offer bookkeeping services in the Gold Coast to help you keep better track of your financial assets. Book a consultation with us today.

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