A Month in the life of a Portfolio Finance Director

Look Ahead, Look Ahead, Look Ahead – The Importance of look term cashflow forecasting.

One of the areas that I always focus on with my clients is long term cashflow forecasting.

It is often not something that they have ever considered, they are entrepreneurs, they have lots of ideas; plans for new products, new markets and new ventures. They dream big and have a great deal of energy.

Often, they overlook how they will fund the growth they want. They underestimate the upfront costs of building a sales team which needs time to get up to speed, they fail to appreciate how much more stock they will need to service new customers.

They tend to identify cashflow issues late and then decide that they need new funding.

Again, they tend to think that this can be arranged quickly, this often really isn’t the case.

Lenders are rightly cautious, they have rigorous procedures: credit committees, independent reviews. They are numerous hoops to jump through: landlord waivers, removal of prior charges.

These all take time.

And time is often in short supply by the time a business has realised that it needs more cash.

As an experienced Finance Director, this is one of the things I discuss regularly, and I like to get funding discussions happening long in advance of the need.

I build relationship with funders, prepare long term forecasts and keep a close eye on cash.

In my view it is better to be looking for too much funding too soon, than too little too late.