FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

Know Your Business’ Cash Needs in Uncertain Times

by Kevin Ryan, CPA/Partner, Citrin Cooperman

Aug 15, 2020

PHOTO: © ALEXANDAR IOTZOV – DREAMSTIME.COM

August 2020

As COVID-19 continues to impact our health care system and reopening strategies, it is more important than ever to monitor your business cash flow. Many businesses are getting by with funds received via PPP loans, but those loans were intended as a short-term fix. For many companies there may not be more relief programs, and those loans may not be fully forgiven — which means they will need to be repaid.

Because companies face more uncertainty and volatility than ever, it is imperative to have a firm understanding of the business’ changed outlook and cash needs. Knowing how much cash your business generates, from what sources and specifically when it is generated is important. Knowing how much cash your business will need and when it will need it is equally important. A great tool to assist in this endeavor is a 13-week cash flow projection.

The 13-week model covers a full quarter of a business year; and since it covers a shorter range, it allows for more accuracy than an annual cash flow. Preparing a 13-week cash flow will force you to look at your business inflows and outflows and make decisions about items such as capital expenditures, whether or when you need to access your credit facilities, where to reduce expenses, and ensure receivables are collected as quickly as they were pre-pandemic.

This cash flow forecast allows you to prepare for upcoming liquidity issues and quickly pivot where needed. Since your budget and your cash flow model have common components, keep in mind the 13-week projection should complement the budget, not take the place of it.

For your projection to work, you will need to create a template. Enter an opening cash balance and then make assumptions on weekly cash inflows and outflows. No one is clairvoyant enough to nail these assumptions for the next three months, but this exercise forces you to view things at a more granular level and do a deep dive into your business.

For the inflows, account for cash you believe you will collect (not earn) on a weekly basis and the expenses paid (not incurred) on a weekly basis. This gives you an estimated cash balance at the end of each week. Delineating the different vendors and expenditures down the left-hand side of the template allows you to modify payments and compare different scenarios; this is especially meaningful when you see liquidity get tight during a certain week. Once a week, place the actual results in the template and extract the estimates for that week, automatically updating the cash balance. As each week falls off, add another week, and you have a rolling 13-week cash flow projection.

Make sure you monitor the results and take time to review the data. While you refine your process, it may make sense to add or delete categories based upon your analysis, or you may broaden or narrow your inflow and outflow categories to track the data you determine most valuable.

As a business owner, it is essential to have a plan in place to have the right amount of cash at the right time to handle your cash needs. The best way to have peace of mind is to develop an effective, rolling 13-week cash flow forecast and to take action based on the results.

The content of this article is for informational purposes only. It is not intended to be a substitute for professional financial advice.
Always seek the expertise of a certified financial advisor or other qualified provider with any questions you may have regarding personal finance, investment and money-related issues.

Introducing

FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

#globility

Insta Feed
Lifestyle
Sep 24, 2021

Fall Travel Trends from Vacasa

With the autumn in full spring, now is time to start planning your fall weekend getaway.  Whether a relaxing weekend on the lake, leaf-peeping or hiking, check out these fall travel trends from vacation rental management company Vacasa.

Experiencing GBTA Convention 2021
Safely and Responsibly

GBTA’s Convention 2021 will bring the business travel industry together for the first time in a long time. Once again, you’ll learn and connect with experts and each other, along with discussions with leading thinkers, entrepreneurs and change makers addressing the issues that matter most.

September 2021
Sep 23, 2021

Host a Fabled Business Event in Wonderful Copenhagen

I imagine that when writer Hans Christian Andersen mused, “Life itself is the most wonderful fairy tale,” he was standing at the edge of Copenhagen’s historic Tivoli Gardens, one of his favorite haunts, enlivened by the swirl of human happiness that surrounded him: children laughing; carousels spinning; games of chance played for prizes; lovers holding hands; hungry people whispering over sweets, hot drinks, beer and towering, open-faced smørrebrød, Denmark’s quintessential sandwich. That fairy tale lives on today at the second-oldest amusement park in the world, a spectacle of folly architecture, bakeries, gardens, rides, restaurants, puppet shows and joy ... and which also happens to be one of the city’s most storied places to convene for business.

Canada
Sep 23, 2021

Reimagined Park Hyatt Toronto Officially Reopens Its Doors

The restored Park Hyatt Toronto reopened its doors, bringing luxury, sophistication and glamour alongside a nod to the hotel’s Canadian heritage. Alessandro Munge of Studio Munge collaborated on the hotel’s refresh, drawing inspiration from Canada’s seasons and natural landscapes.

Greece: Destination Luxury

Since its prestige for attracting the world elite grew in the 1960s, Greece remains the go-to destination for glittering holidays. Each step of the journey is enrobed in luxury, from culinary traditions with the highest standard of execution and name-brand, high-end shopping to first-rate wellness locales and elite accommodations, like 5-star hotels, private villas and yachts.

eFlyer Reviews
Sep 22, 2021

Irwin’s Review

I recently dined at Irwin’s in Philadelphia. The restaurant is located on the rooftop of the Bok Building, a former school turned collective of small businesses, non-profits, artist workshops, a bar and restaurant. I previously visited Bok for the bar and yoga classes, and I was excited to experience the restaurant.

eFlyer Lead
Sep 22, 2021

Cathay Pacific to Use Sustainable Fuel for 10 Percent of Total Consumption by 2030

Cathay Pacific reaffirms its commitment to reaching net-zero carbon emissions by 2050 with a pledge to use Sustainable Aviation Fuel for 10 percent of its total fuel consumption by 2030. The airline has made pioneering efforts in supporting SAF development for more than 10 years.

Register Today for the Most Important Gathering of Business Travel Professionals

The Global Business Travel Association’s (GBTA) Convention 2021 will be unlike any other convention before it, as we come together in person for the first time since the business travel industry drastically changed and look forward to rebuilding and reshaping the future. GBTA Convention 2021 will bring all of us together to learn from experts and each other, in-person at Orange County Convention Center in Orlando, Florida, Nov. 17–19. The safety of our attendees is our top priority. View health and safety protocols.

Daily
Sep 22, 2021

La Concha Resort Puerto Rico Review

Arriving early afternoon in Puerto Rico, we jumped in an Uber and took a short, 15-minute drive from the airport to La Concha.  As it was Tuesday, the streets were not too busy and the hotel lobby was calm. During the weekend, the scene likely would have been more bustling. We were greeted by a staff member who requested proof of vaccination and government-issued ID, and were given a wristband to indicate we were fully vaccinated. All guests are required to be vaccinated and wear masks at all times while moving around the hotel. Hand sanitizer stations were placed around the lobby, in elevators and in each common area.