Cash Flow Planning

An important tool for small businesses that is often unutilized is cash flow planning. Understanding the cash needs of the business and where cash is coming from is critical to running a successful business. When you don’t know what cash you have coming in, cash flow planning will show shortfalls that when known, can be more easily taken care of in advance of an emergency.

Cash flow planning is important especially for companies struggling or losing money, and for owners who don’t have finance expertise or who have an unsophisticated financial staff. Regular cash flow planning enforces discipline; an important aspect for struggling companies to get under control if they want to return to, or obtain, bank financing.

Ideally, a rolling cash flow report should be run every thirteen weeks but we find that many of our clients are not doing that; in fact, they do no cash flow planning at all. That leads to them calling us in a panic whenever they need a cash infusion.

Unrealized future needs and panicked calls could be eliminated with consistent cash flow planning. With an understanding of how much cash they’ll need, and at what times, business owners will be better prepared to discuss their needs with their lenders who will then be better able, prepared, and more willing to help them.

For owners with no or limited finance expertise, there are many things they can do to get the cash flow planning help they need. For one, they can ask their lenders or CPAs for a template where they’d just need to plug in numbers. At Celtic Capital, we have our own model that we share with clients. Another option, and something we do many times, is to refer our clients to contract CFOs who can set up a cash flow report template. It’s easy, too, for owners to go online where, for a subscription fee, they can access a cash flow planning template.

The bottom line is that business owners just need to get something set up that works for them and go from there. Once part of their ongoing routine, cash flow planning will save business owners and their lenders a lot of headaches.

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or, or visit us at