Cashflow forecasting for Perth Hills businesses

Bottom Line Up Front (BLUF) - For Mundaring and Midland businesses, a lean cashflow forecast protects operations when transport limits or bushfire season disrupt revenue. Delegate the build to your bookkeeper, automate data feeds, and keep the owner focused on exception review and strategic decisions.

“Cashflow is oxygen — keep it flowing.” — Business maxim

Disclaimer. This blog provides general guidance only and is not tailored accounting, financial, HR, or legal advice. Consult a qualified professional before changing forecasting or financial processes.

Introduction

Cashflow forecasting is a practical early‑warning system, not a crystal ball. The bookkeeper owns the mechanics; the owner sets thresholds and approves actions when risks breach them. Keep it minimal: automate inputs, use short horizons, and escalate only material exceptions. In the Perth Hills, build buffers for delays (e.g., train stops at Midland leading to logistics changes) and summer bushfire risks that can shift demand or access.

Three strategies to implement cashflow forecasting

• Strategy 1 Build a 13‑week rolling forecast

  • What to do: Project weekly inflows (receipts, grants) and outflows (wages, rent, BAS, suppliers) for the next 13 weeks.

  • Why: Short, rolling windows catch issues early and let you act fast.

  • Automation tip: Pull receivables, payables, payroll, and BAS dates directly from accounting and HR systems.

• Strategy 2 Set thresholds and actions

  • What to do: Define trigger levels (e.g., cash < $X or negative week) and pre‑approved actions (accelerate debtor collections, delay discretionary spend, draw on facility).

  • Owner rule: Owner approves only actions that affect pricing, staffing, or supplier terms; bookkeeper executes routine steps.

• Strategy 3 Layer local risk buffers

  • What to do: Add buffers for transport delays (Midland rail limits → bus reliance), summer bushfire interruptions, and holiday season timing.

  • How: Use conservative inflow timing, stock contingency, and a “reserve line” amount (e.g., 2–4 weeks of fixed costs).

  • Exception rule: If forecast drops below reserve for two consecutive weeks, escalate immediately.

Implementation checklist

• Ownership: Bookkeeper builds and maintains the 13‑week forecast; owner sets thresholds and approves strategic actions.

• Intent: Early visibility with fast, pre‑approved responses; owner reviews only material exceptions.

• Automation: Scheduled pulls for AR/AP, payroll, BAS, and bank balances; auto‑update weekly.

• Documentation: Minimum viable — one sheet plus a 3‑minute SOP video; store digitally.

• Exception thresholds: Cash < reserve; negative week; AR days > target; variance >10% from prior week.

• Communication: Weekly one‑line status to owner; detail only if exceptions trip.

Next steps

1. This week: Define reserve amount and exception thresholds; confirm who executes each pre‑approved action.

2. Within 14 days: Build the 13‑week model; connect automated inputs; run a dry‑run against last month’s actuals.

3. Within 30 days: Hold a brief review; refine buffers for transport and bushfire risks; publish the escalation playbook.

Useful AI prompts

• “Create a 13‑week cashflow forecast template with automated AR/AP/payroll/BAS inputs.”

• “Draft a 3‑minute video SOP: how to refresh the forecast weekly and escalate exceptions.”

• “Generate a playbook of pre‑approved actions tied to cash thresholds and AR aging triggers.”

Mission Command Principles for Business

• Build mutual trust: Leaders trust teams to act; teams trust leadership to support.

• Create shared understanding: Everyone knows the vision, objectives, and constraints.

• Provide clear commander’s intent: Goals and outcomes are explicit; execution is flexible.

• Exercise disciplined initiative: Teams solve problems without waiting, aligned to strategy.

• Use mission orders: Objectives are assigned; methods are left open.

• Accept prudent risk: Smart risks are encouraged for innovation and growth.

These principles ensure the owner sets the aim, the team executes, and the system flags exceptions — without dragging the owner into the weeds.