Cash Flow Planning is Perhaps The Most Important Tool for Small Businesses

Understanding the cash needs of your 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. It’s a tool that when put in place on an active basis, enables you to to project when you’ll have cash issues and allows you to react to them before they cause a negative impact on your business.

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. That will help avoid panicked calls to your lender for cash infusions. To set up cash flow planning for your business, there are many things you can do. For one, ask your lender or CPA for a template where you 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, to go online where, for a subscription fee, you can access a cash flow planning template.

With an understanding of how much cash you’ll need, and at what times, you’ll be better prepared to discuss your needs with your lender who will then be better able, prepared, and more willing to help you.

The bottom line is that you just need to get something set up that works for you and go from there. Once part of your ongoing routine, cash flow planning will save you and your lender 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