Keyword to include: cash projections It is important for any organization to have some idea of how much cash they are going to receive in a given month.
This is especially true when it comes time for budgeting and planning expenditures.
A company should not only forecast the expected cash receipts.
But also project what those receipts will be after accounting for all possible expenses that might arise during the month or year.
This article discusses several factors that need to be considered when predicting future cash receipts, so read on!
The first thing a company needs to consider when forecasting future receipts is how they project their expenses for the month.
This includes any money that might be needed during this time, such as payroll or marketing costs.
If there are no major projects lined up in following months, it may not make sense to overspend on capital expenditures and other fixed monthly items (e.g., rent).
A business should also factor in seasonal spending habits.
While some businesses operate year-round, others experience heavier sales around certain holidays or events like Valentine’s Day.
It would be wise to take these trends into account so that an organization can plan accordingly for both good and leaner times of the year!