Cash flow planning has become one of the most important tools for business owners and CFOs, especially in today’s fast-paced economy. Froehling Anderson helps clients gain clarity, confidence, and control over their financial picture. Our goal is simple: help you keep more of your cash working for you.
Cash flow planning is the strategic process of forecasting how money moves in and out of your business. It’s more than just watching your bank balance, it’s understanding what’s coming, what’s going, and how to prepare for what’s ahead.
Here’s what that typically includes:
Cash Inflows
Revenue from sales, customer payments, investment income, loans, or other receipts.
Cash Outflows
Operational expenses (rent, utilities, payroll), loan payments, taxes, capital purchases, and other obligations.
Cash Flow Statements
A month-over-month or quarter-over-quarter snapshot of how your cash moved during a specific period.
Cash Flow Projections
Forward-looking planning that estimates future cash inflows and outflows based on anticipated revenue, expenses, and obligations.
A strong cash flow plan keeps a close eye on:
Many businesses also monitor three key metrics:
When these metrics are healthy, your business stays healthy.
Cash flow planning makes sure you always have enough liquidity to cover short-term needs such as payroll, rent, vendor bills, and unexpected expenses.
Even highly profitable businesses can run into trouble when receivables lag. Planning helps smooth out those bumps.
A clear view of cash availability helps answer questions like:
Better visibility leads to better choices.
Cash flow planning is your early warning system. If projections show negative cash flow ahead, you have time to make adjustments, renegotiate payment terms, delay non-essential expenses, or build up reserves.
Banks and investors love clarity. A well-structured cash flow plan shows lenders you understand your numbers and can manage money responsibly, often making financing easier to secure.
Cash flow planning ties today’s actions to tomorrow’s goals. Whether you’re thinking about expansion, succession planning, retirement strategies, or new investments, a reliable forecast helps map the path forward.
Many Minnesota businesses like manufacturing, construction, retail, and agriculture, experience seasonal cash swings. Planning allows you to build reserves during busy months and manage slower periods with confidence.
Rapid growth without cash flow discipline can create strain. Cash flow planning ensures you can afford new hires, new equipment, or additional space before you commit.
Understanding the different types of cash flow helps business owners and CFOs see exactly where cash is being generated and where it’s being used.
Cash generated or used by day-to-day business activities. This is a key measure of financial health.
Cash related to long-term investments such as buying or selling equipment, property, investments, or other assets.
Cash related to raising and repaying capital, issuing or repurchasing equity, and borrowing or repaying debt.
Cash left after paying operating expenses and capital expenditures. FCF is a powerful indicator of your ability to:
Businesses generally use one of two methods to prepare and manage cash flow statements and forecasts.
Lists actual cash inflows and outflows during a period. This method is more common among small and mid-sized businesses because it’s simple and easy to understand.
Starts with net income and adjusts for changes in assets and liabilities to show cash flow from operations. This is often used by larger or more complex companies that rely heavily on accrual accounting.
A thoughtful cash flow plan can create meaningful improvements across your business:
At Froehling Anderson, our business advisory and consulting team brings deep industry experience and financial modeling expertise to every engagement.
Whether your business is navigating growth, managing tight margins, or planning for the year ahead, our Minneapolis and St. Cloud, Minnesota based CPAs work with you to:
We take a collaborative, hands-on approach, helping you understand your numbers, make informed decisions, and gain the clarity you need to run your business confidently.
Cash flow planning isn’t just a financial exercise; it’s a strategic advantage. Whether you’re leading a growing company or working to stabilize operations, having a thoughtful cash flow plan gives you the visibility and flexibility to run your business with confidence.
If you’re looking for a proactive partner who understands the unique needs of Minnesota businesses, our team is here to help. Let’s build a cash flow strategy that moves your business forward.
Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or audit advice. Please consult with your plan advisor or CPA for guidance tailored to your situation.
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