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July 14, 2020

A Case for Cash Flow Forecasting


A sound approach to cash flow forecasting will help integration companies get through the COVID-19 crisis and plan for growth beyond the recovery, says Solutions360’s Brad Dempsey in a P2P Series interview.

Doing data entry and working on forecasting might be the last things many integrators want to tackle as they battle through the COVID-19 crisis and work toward recovery; however, executing a cash flow forecasting model is likely to help companies get through business challenges, says Solutions360 Founder and President Brad Dempsey.

In fact, the volatile state of the market necessitates cash flow forecasting, Dempsey says. “We’re dealing with such change day to day. Real forecasting gives you the ability to do some ‘what-if’ scenarios.”

Through our business continuity content, we’ve stressed the importance of focusing on revenue-generating activities. In this case, Dempsey says the return on investment is survival. “It’s important to separate revenue and cash.” Integrators might focused on revenue-generating activities during the crisis, but they might have difficulty actually collecting cash.

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“Cash is king. We’re going through a time where managing your cash flow goes hand in hand with managing your revenue and your resources. Longer term, as we come out of this era, it’s really about being able to grow your businesses and having the resources to support that growth.”

Cash Flow Forecasting in the COVID-19 Era
As often as we’ve heard terms like “unprecedented” and “unpredictable” since the COVID-19 pandemic struck, you have to wonder how reliable forecasting can even be conducted in the current climate. Dempsey says it’s like any journey.

Business is a journey,” he says. “You have to have direction and chart a course for your journey – and you know it’s going to change. But, without that course and direction, you’re just going to flounder.

Related: Solutions360’s 7 Keys for Accurate Cash Flow Forecasting

“Charting that course, having that destination, understanding how different factors may change the course, anticipating what happens when your course changes – and not being surprised by it – and being able to react with ideas already in place is really important in times like these.”

Watch the video above for more on why cash flow forecasting is critical right now. Dig into the steps your company can take to conduct accurate cash flow forecasting here.

Brad Dempsey is founder and CEO of Solutions360. During NSCA’s 2020 P2Pv, he’s presenting “Cash is King! CFO Perspective on Understanding Liquidity and Cash Flow Managed Services Environment. Register now for 2020 P2Pv to watch on demand.

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