Cash flow forecasting
Alpine Accounts builds rolling cash flow forecasts for small businesses in Hervey Bay, the Fraser Coast and across Australia. A forecast projects the cash position week by week or month by month, based on the actual timing of income and outgoings rather than an averaged assumption. For seasonal businesses, which describes much of the Fraser Coast economy, this is the difference between planning for a quiet period and being surprised by one.
Profit and cash are not the same thing
A profitable business can run out of money, and regularly does. Profit is recognised when you invoice. Cash arrives when the customer pays, which may be sixty days later, or never. Meanwhile wages, super, rent and stock all leave on schedule.
The gap between those two timings is where most small business failures actually happen, and it is entirely predictable if anybody is looking.
Seasonality on the Fraser Coast
Tourism and hospitality here swing hard between whale season and the quiet months. Holiday letting fills and empties. Construction follows the weather and the funding cycle. A business that budgets on an average month will be wrong in both directions, twice a year, every year.
A forecast built on your actual seasonal shape tells you in March what August looks like, which is when you can still do something about it.
How the forecast stays useful
A forecast built once and filed is worthless within a month. These are rolling, updated against actuals as each period closes, so the variance between what was projected and what happened becomes its own signal. Consistent over-optimism about debtor payment timing shows up quickly and can be corrected.
Common questions
How far ahead does a forecast look?
Usually thirteen weeks in detail for near term cash management, with a twelve month view for planning. The near term view is the one that prevents surprises.
My income is unpredictable. Is forecasting still worth it?
Especially then. Unpredictable income is exactly the case where an averaged assumption fails. A forecast built on your real pattern, including the quiet periods, is more valuable to a seasonal business than to a steady one.
What if the forecast turns out to be wrong?
It will be, to some degree, and that is useful. Comparing forecast to actual each period shows which assumptions are consistently off, and the forecast gets more accurate as a result.