Author
Chris King

Properly managing a business’ cash reserves requires not only knowing how much cash is available today but how much will be available in the future.

We can assist with:

  • Projections based on monthly budgets
  • Planning for asset purchases, tax payments and owner distributions
  • Stress-testing for unexpected downturns or major outflows

Case study

A building supplies business was having difficulty predicting how much cash they were likely to have over the coming months. Business was going well and the owner wanted to withdraw some money from the business, but they also knew that they had large tax bills coming up.

Pilot’s Financial Modelling & Analysis team built the business a Cash Flow Forecasting Model which used the business’ actual financials and budgets. From this information, the model calculated the expected cash balance for the end of each month based on assumptions around how quickly invoices were paid after being received. These timing assumptions were initially based on historical trends, but the model included the flexibility to change these from the Dashboard, to test what would happen if invoices were paid sooner or later.

The business now has greater confidence that there will be sufficient cash available to pay their tax bills and owner’s withdrawals, while maintaining a healthy balance in the bank.

For more information, contact Chris King from our Financial Modelling Team on (07) 3023 1300.