Based in Tauranga and specialising in quality business advice and income tax return preparation at an affordable price
Malcolm Webster Limited - Chartered Accountants

Budgeting and Cash Flow Forecasting


The terms budgets and cash flows are often used together. While they are related, there is a distinction.

Budgets are generally concerned with how one goes about making a profit. About what the cost levels are, and what the margins and sales levels need to be.

Cash is about liquidity. About not having too much tied up in stock, about being able to pay suppliers on time, about converting the sale of your goods or services into cash receipts, and about having the right amount of funding at the time it is needed. Profitability and cash flow are intertwined. Both need to be understood and managed together.

There’s an old saying –“if you don’t know where you’re going, then any road will get you there”. If you don’t plan, then wherever you get to in the future is likely to be random. You’ll know if you’ve failed. How will you know if you’ve achieved, or under-achieved against your potential?

It seems more logical to plan, and therefore to work towards a specific target. You can still make adjustments to details of your plan along the way, as you remain focused on that identified target. You may even move the target, but if you do, you’ll be better placed to understand the implications.

Budgets and cash flow forecasts help to ensure you know what road you are on, and where you expect to be at the end of it. We’ll work with you to develop these tools and strategies to improve your bottom line.