Why Cashflow Forecasting Matters
Overall business confidence in New Zealand has shown some tentative signs of improvement in 2025. But the economic reality for many small businesses remains challenging. Lower sales and higher costs can quickly create cashflow problems. With less money coming in and more going out, it’s easy to end up in a cashflow crunch.
The best way to stay in control is to know what’s ahead and that’s where cashflow forecasting helps.
What Makes Cashflow Forecasting So Powerful?
Think of cashflow forecasting as your business's financial crystal ball. It shows you exactly where your money will be in the weeks and months ahead, giving you the power to make smart decisions before problems arise.
When you know a cash shortage is coming three months out, you have time to act. You can chase overdue invoices, negotiate payment terms with suppliers, or arrange temporary funding.
Without forecasting, you are flying blind until the crisis hits.
The Many Ways Cashflow Forecasts Support Your Business
Cashflow forecasts are not just about avoiding trouble – they are strategic tools that can transform how you run your business:
Avoiding Financial Trouble: Spot cash shortfalls before they happen and take action to prevent them.
Planning for Future Cash Shortcomings: Know exactly when you might need extra funding and how much you will need.
Meeting Your Tax Obligations: Ensure you have cash set aside for GST, PAYE, and provisional tax payments when they are due.
Planning Asset Purchases: Time major purchases when your cash position is strongest.
Planning for Growth or Expansion: Understand the cash impact of growth before you commit to it.
Making Informed Borrowing Decisions: Know exactly how much you need to borrow and when you can pay it back.
Benchmarking Your Performance: Compare actual results against your forecasts to improve future planning.
Testing Different Strategic Scenarios: Model different business decisions to see their cash impact before you act.
Optimising Invoice Timing: Work out the best times to send invoices to maintain steady cash inflows.
Building Your Case for Investment: Show investors or lenders exactly how you will use their money and when they will see returns.
Forecasting Staff Costs: Understand the full cash impact of hiring before you make job offers.
By taking a proactive approach, you’re not only protecting your business from risk, you’re also creating opportunities for growth.
Making Forecasting Work for Your Business:
Effective cashflow forecasting does not require complex software or advanced accounting knowledge. It starts with understanding your cash patterns:
When do your customers typically pay?
What are your regular monthly expenses?
When do large bills come due?
How seasonal is your business?
Once you understand these patterns, you can build forecasts that give you real insight into your future cash position. Update them regularly as circumstances change, and use them to guide your business decisions.
The Competitive Advantage of Cash Certainty:
Businesses with strong cashflow forecasting often outperform their competitors. They can take advantage of opportunities when others cannot, weather economic storms more effectively, and grow more sustainably.
In today's challenging economic environment, this advantage is more valuable than ever. While other businesses struggle with uncertainty, you will have clarity about your financial future.
The Real Cost of Poor Cashflow Management
Without proper forecasting, businesses often find themselves in reactive mode. They scramble to pay bills, miss early payment discounts, damage supplier relationships, and sometimes face the ultimate consequence – business closure.
The statistics are sobering: cashflow problems are cited as a major factor in business failures. Yet these problems are often preventable with proper planning.
Helping you stay in control of your cashflow
Book some time with our team to talk through your cashflow challenges. We will help you get detailed with your forecasting and look for opportunities to boost revenue and cut costs.
Do not let cashflow problems catch you off guard. Take control of your financial future with professional cashflow forecasting support.
Ready to transform your business's financial management? Contact Kinghans today to discover how proper cashflow forecasting can give you the confidence to make better business decisions.