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Cash Flow & Budgeting Analysis

Cash is a fundamental component of every business. Even if your company is profitable, you need to have sufficient cash on hand to fund expenditures. McLan Accounting Services LLC can help you analyze your cash flow patterns – how cash flows in and out of your business each month – to ensure that you have enough cash for operations. This is important for making sure you have cash on hand for short-term operations along with future needs and is a crucial step in forecasting your company’s overall financial health. At the same time, developing and monitoring a budget allows businesses to track their cash flow in more detail, better understand the impact of unexpected changes in revenue, and respond and anticipate future needs. Cash flow and budgeting analysis isn’t just for businesses. This will help you better track your household income and expenditures, allowing you to monitor progress and make needed adjustments to achieve your personal financial goals.

Cash Flow Versus Budgeting

While a cash flow analysis will help you better understand how money is coming in and going out of your business or household, you also need to develop a budget. A budget assigns portions of your income to various categories and provides a mechanism for tracking individual sources of income and expenditures. Just as importantly, when you develop and maintain a budget for your business or household, you are able to track how your money is actually being spent from month to month and year to year. This gives you a better understanding of how much cash you have for discretionary household spending, investments and debt-reduction strategies. Ultimately, adhering to a budget should ensure that you have ample cash on hand to deal with your short-term financial obligations, and give you the tools and perspective you need to achieve long-term financial success as well.

Monitor Progress

Once you have a solid understanding of your cash flow – and have established a budget for how to allocate your business’ or household’s cash each month – it’s important to keep a close eye on what’s going on. An unexpected surplus or deficit in your cash flow might require you to make some adjustments from time to time. Do you save that extra income for a future anticipated expense, or do you use it to pay down current debt? Are there areas in your budget that could be trimmed to deal with an unexpected drop in income or revenues? Drawing from our experience and knowledge with cash flow and budgeting analysis, McLan Accounting Services LLC can help you determine what makes the most sense for your particular situation.

Whether you are a business owner or establishing a household budget, the professionals at McLan Accounting Services LLC can help you with tried-and-true techniques, tips and tricks to understand your cash flow, establish your budget, and stay on track.

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