Cashflow Modelling

Cash flow modelling is the practice of planning and forecasting the sources and uses of cash to keep businesses running and growing.

Cash is the lifeblood of any business, however, based on the latest Xero Small Business Insights, we know that many small businesses are being stretched. In July 2019, only 54.6% of small businesses were cash flow positive! The insights also suggest that over half of all the invoices they are issuing are paid late by an average of 23 days. More so than ever, proactively managing business cash is a vital step in ensuring the continued success of your business.

Many clients are good at setting revenue budgets but fail to consider the impact of delays in receipts, timing of big tax payments etc which can lead to unexpected cash crunches. This is where a good financial model can help - they are an invaluable tool for operations, funding, and knowing where the business is heading.

TGS Partners use a 3-way forecast model to gain an understanding of a business and its key drivers. A 3-way model links the income statement, balance sheet, and cash flow statement into one dynamically connected financial model.

We have worked extensively with business owners to develop 3-way forecasts for their business either as part of a pre-lend or just for use internally. Using Modano, we build flexible and robust financial models. TGS Partners has significant experience building financial models, both simple and complex. Our experts work with you to understand the business’ key drivers. We then work with key stakeholders to develop a 3-way forecast model (Profit and Loss, Balance Sheet and Cash Flow) underpinned by those business drivers. Through our models, we can run various what-if scenarios letting you test the impact of key decisions before making them. We can upload forecasts to your financial reporting systems allowing you to benchmark your performance and keep you on track to meet your goals.