Cashflow
Cashflow is the critical to the survival of the organisation. Put simply it indicates your ability to pay your bills. It is important not to confuse this with profit, which although provides an indication of business performance, does not guarantee success. Most organisations need to prepare cashflow forecast to help them understand the movement of cash within the business.
If you receive nursery education grant payments you will probably experience times when you are waiting urgently for this funding in order to pay bills. Understanding this position by forecasting can help you manage your finances to overcome this. For example, not purchasing new resources until the funding has been paid.
Further information on producing cashflow forecasts is contained within the Financial Forecasting section.
Getting people to pay on time is also critical to ensuring that the cash flows through the business as expected, so ensuring that your pricing and payment policies are clear and sound encourages prompt payment and discourages bad debts.
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