Weathering the Storm Series Part 2: Re-forecasting

  |  June 1, 2020

In our last post, we highlighted re-forecasting as a method of cash management. The 13-week and 12-month cash flow forecasts are essential tools to predict a company’s cash position. Regardless of economic conditions, middle-market companies benefit from these tools as they support strategic planning.

In developing cash flow models, best practices begin with a detailed analysis of networking operating accounts. This exercise can highlight problems such as a bloated balance sheet – a situation we all too often run into. A bloated balance sheet can signal a disconnect between sales and operations creating more complexity in building a solid cash flow model, however, this can also highlight opportunities for operational improvements.

Remember, since we have seen rapid economic change this will not be a typical re-forecast. We recommend beginning with the basics.

In our next few posts we will provide tips on how to build and incorporate best practices into forecast models.

As you read our series, we encourage company CFOs, Investors and other financial professionals to share their best practices…. remember we are in this together.