5 Steps to Successfully Implement Your Cashflow Plan

  • Having and implementing a good cashflow plan means that you’ll have a clear understanding of what money comes into your business and how much money goes out of it.
  • A lot of entrepreneurs lose track or fail to maintain a cashflow management plan due to focusing on other aspects that may seem more appealing. But your business success heavily depends on the financial stability and well-being of your company.
  • In order to successfully maintain your business and always have cash in your company, here are the top 5 steps to nail a cashflow plan. cashflow-forecast


It’s fair to say that cashflow and budget management typically rank low on most peoples’ priority lists, especially for time-poor business owners. But while it isn’t exactly the sexiest of business ownership activities, the extent to which you can effectively manage your incomings and outgoings is, without doubt, one of the biggest predictors of your company’s long-term success.

The term ‘cashflow’ is used to describe the movement of money in and out of a business each month. Essentially, the objective of any business is to have more money coming in each month than is going out, the term used for this is ‘positive cash flow.’

In Australia, lack of cash, or working capital, is known to be the primary reason that SMEs go out of business. “Cash is king as we all know. It really is the life blood of your whole business. If you don’t have cash, you can’t buy stock, pay bills, hire staff – you need to be on top of your cashflow if you want to succeed in business,” says Paul Bevan, CEO at Boss Finance Australia.

According to Xero’s recently launched Small Business Insights research which reviewed the aggregated data of more than 500,000 Australian small businesses, only 50.7 per cent had a positive cashflow as of June 2017.

“Seasonal businesses are at greatest risk of negative cashflow because they will have significant fluctuations in business across the year,” Paul says.

However, regardless of the industry, all business owners should have their own formal method of recording, tracking and forecasting incomings and outgoings each month. For anyone struggling with cashflow, implementing a formal plan can get you back on track, achieve a positive cashflow every month, and avoid financial stress.

Proper cashflow management can also enable you to take better advantage of business opportunities as they come up. Sydney-based tradie recently reached out to Boss Finance Australia for help. “He had great turnover for the year, but due to the nature of his business and the ebbs and flows each month – paying invoices, paying suppliers, buying materials, paying wages etc. – he was always finding himself short on cash,” says Paul. “We were able to map out his cashflow month to month so he could see where upcoming shortfalls were likely to occur and prepare accordingly. The outcome for him was significant. His stress levels are reduced and the clear picture of his incomings and outgoings has given him the ability and confidence to take on larger jobs as they come up, whereas he would have previously been reluctant.”

Here are 5 key steps to adopting a simple and successful cashflow plan for your business:

1. Use a smart template to build out your plan

There are plenty of expensive software solutions out there that can manage your budgeting and forecasting for you. But for a simple cashflow plan, you can download simple Excel templates for free too. Alternatively, if you’re a spreadsheet whiz, you may choose to build your own!

2.  Identify where your revenue is coming from

Once you have the right template, it’s time to get started creating your business cashflow picture. Start by reviewing your business revenue. Organise your income by breaking it down into two main streams:

  •  Recurring income (product sales or services), and
  •  One-offs (like a government grant, loan or asset sale).

It’s important to know exactly where your money is coming from each month – and it might surprise you (or not!) to know that for most business owners, this is the first time they’re seeing the full picture since starting their business.

3.  Identify where your money is going

Now it’s time to review your historical costs. Enter your monthly expenses into your Cashflow Plan. If you’re using the template referred to in Step 1, it offers you a list of standard outgoings including insurance, stock purchases, office supplies, loan repayments etc. The template will then automatically subtract your expenses from your income.

4.  Review

Now that you’ve created a clear picture of your monthly income and expenses, it’s clear to see where your strongest and weakest months are, as well as the periods where your costs are highest. Now that you can see it clearly in front of you, it’s possible to plan ahead.

If this is the first time you’ve undertaken this kind of analysis, we recommend you ask your accountant to provide you with some figures on comparable businesses in your industry so you can compare typical costs and revenues.

Consider how your cashflow compares to your financial goals – are you on track, or do you need to think about a different approach? Are you in serious cashflow trouble? If you can see that more cash is leaving your business than is coming in each month, consider whether additional working capital via a loan or line of credit could help. Other factors to consider include an audit of your business activities to identify areas that are costing you more time and resources than they are worth. Most businesses have opportunities to cut down costs and increase revenue by removing redundant practices and focusing in on their areas of greatest profitability.

5.  Update and monitor regularly

Make sure you stay on top of your budget by updating your plan on a monthly basis or as your circumstances change – SME is an ever-changing environment!

The time you devote to implementing sustainable cashflow management practices into your business will pay dividends. Why not get started now!

Willow Sloane

Director, Communications and Culture at

Everything I do is underpinned by creativity and a focus on people and culture. I value transparent communication, delivered at the right times, and see it as a critical ingredient to every business' growth and success. I work across the HR and Communications sectors, and believe the two are inextricably linked. I work with executive and senior leaders to develop communication strategies that deliver on organisational priorities. I'm most passionate about working with others to achieve goals