Financial management tools

2014-06-22T22:07:12Z

Sean: Created page with " Financial Planning Financial planning works from the strategic and business plans to identify what financial resources are needed to obtain and develop the resources to achiev..."

Financial Planning

Financial planning works from the strategic and business plans to identify what financial resources are needed to obtain and develop the resources to achieve the goals. Typically, financial planning results in very relevant and realistic budgets

== Managing Cash Flow ==

One of the most important financial statement for a new business is the cash flow statement. The overall purpose of managing your cash flow is to make sure that you have enough cash to pay current bills. Businesses can manage cash flow by examining a cash flow statement and cash flow projection. Basically, the cash flow statement includes total cash received minus total cash spent.

== Budgeting and Managing a Budget ==

A budget depicts what you expect to spend (expenses) and earn (revenue) over a time period. Amounts are categorized according to the type of business activities, or accounts (for example, telephone costs). Budgets are useful for planning your finances and then tracking if you're operating according to plan. They are also useful for projecting how much money you'll need for business initiative, for example, buying new computers, hiring a new employee, etc. There are yearly (operating) budgets, project budgets, cash budgets, etc. The overall format of a budget is a record of planned income and planned expenses for a fixed period of time.

== Budget Deviation Analysis ==

You learned above that a budget depicts what you expect to spend (expenses) and earn (revenue) over a time period. Budget deviation analysis regularly compares what you expected, or planned, to earn and spend with what you actually spent and earned. The budget deviation analysis can help greatly when detecting how well you're tracking your plans, how much to accurately budget in the future, where there may be upcoming problems in spending, etc.

== Credit and Collections ==

One of your biggest challenges in managing cash flow may be decisions about granting credit to customers or clients, and how to collect payment from them.

[[Category:Construction_management]]

Cash flow forecast

2014-06-22T20:39:25Z

Sean: Created page with " A cash flow forecast is an important business tool for every business. The forecast establishes if your business will have enough cash to run the business or pay to expand it. ..."

A cash flow forecast is an important business tool for every business. The forecast establishes if your business will have enough cash to run the business or pay to expand it. It will also show you when more cash is going out of the business, than in.

A [http://www.businessdictionary.com/definition/cash-flow.html cash flow] forecast shows if a firm [http://www.businessdictionary.com/definition/need.html needs] to borrow, how much, when, and how it will repay the [http://www.businessdictionary.com/definition/loan.html loan]. Also [http://www.businessdictionary.com/definition/call.html called] cash flow [http://www.businessdictionary.com/definition/budget.html budget] or cash flow [http://www.businessdictionary.com/definition/projection.html projection].

Why is it useful?

Building a cash flow forecast allows an evaluation of what cash resources are required and when they are required by. By looking into the future, business owners can identify any future gaps in funding and plan for those gaps accordingly.

Additionally, cash flow models enable you to run various “what if” type scenarios on key variables to see how vulnerable the business is to price changes, staffing levels, exchange or interest rate movements, or any other key drivers.

In larger practices the cash flow projection can be integrated with day to day operations. This can help with identifying what production is necessary, what resourcing is required and providing an assessment of the capacity within a business.

[[Category:Construction_management]]

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Financial management tools

Cash flow forecast