When times are tough and markets are down, cash is king and liquidity will see your business through. With all this talk about bear markets and a lingering recession, it’s easy to scroll through the constant doomsday posts on social media. However, at the end of the day you can always take action to try to ensure your business from failure. 


Your cash flow is what keeps your business going, especially if you're just starting out. Being able to predict your cash flow will allow you to be prepared to pay an expense or take out a loan at the right time. If you’re not already keeping track of your cash flow, you could be putting your business or your clients business at risk. According to recent surveys, 15% of businesses have less than one month of cash overheads and more than 10% of all businesses have no idea how much cash they actually own.

​​Companies who focus solely on profit and not on cash flow are not protecting themselves against economic problems. Even if you are making a healthy profit, the end of the fiscal year can still find you out of money. This is because money from sales often takes time to become available and suppliers need timely payments to continue working with you. You can have a positive profit but negative cash flow if you pay faster than you get paid. To avoid this, you need a cash flow forecasting to manage your spending and determine how to divide your assets so you don't run out of cash.

So how do you get started with financial forecasting?

Well we might be a little biased but we believe Clockwork is the solution. ​​Simply put, Clockwork is on a mission to empower you with best-in-class tools and insights so you can easily manage your finances and sleep better at night.

Large companies hire CFOs and teams of analysts to build financial models, cash flow forecasts, and scenarios for decision making, but small businesses usually don’t have the resources to bring on full-time staff in FP&A roles. That means business owners typically do their own financial planning and analysis in spreadsheets or cloud-based software tools.

Regardless of the tools used, a complete and accurate cash flow projection needs to account for these key building blocks:

  1. First, you’ll need a financial model based around historical trends, key business drivers, and your own assumptions/expectations about future revenues and expenses - i.e. a forecasted income statement

  1. Next, it’s important to translate your revenue and expense forecasts to work out the true cash impact of all that activity. This is where you start building the actual cash flow forecast, which reflects the specific cash timing behavior that’s unique to your business - e.g. invoicing and billing activity, collection and payment patterns, etc.

  1. Once that’s all dialed in, you can add information around any other investing and financing activities that will use or create cash in the future (e.g. loans, asset purchases, dividends, etc.), so you have a complete picture of how money moves around your business, and what to expect going forward, all in one place.


To take it to the next level, you can also build separate “what if” scenarios to experiment with different assumptions about the future (e.g. best/worst case) or explore potential business decisions to see how your finances react. 

That being said we’re not here to peddle cheap automation and dashboards like you might see elsewhere. Clockwork is the only tool that gives you a complete picture of your finances and projections with this level of accuracy, but most importantly, we’re in your corner. You’ll never pay a dime for training or support, and our experienced team is always available to walk through your models, talk through your business challenges, and even brainstorm improvements to the platform - whatever it takes to help you succeed.


To learn more about how Clockwork helps small businesses realize and work towards a better financial future, create your account to start a free 14-day trial (no credit card required). Connect your QuickBooks Online or Xero account to create your first financial model in minutes.

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