Forecasting your company’s financial position has always been important. It helps you monitor business performance, budget for purchases, identify credit needs and see the potential impact of change.

Cash flow forecasting is a key part of that, as it helps you make more informed business decisions. And because of two significant recent developments, it’s never been more crucial.

The first one is the obvious one. It’s the elephant in everybody’s room right now…

The impact of Covid-19

At the time of writing, we’re six weeks into the UK’s coronavirus lockdown, so you may have already seen some short-term impact to your cash due to the self-isolation measures imposed by the government.

If your business is office based, you might still be operating largely as normal, with your teams working remotely from home. But if you’re a physical bricks-and-mortar business, this may not be an option.

Either way, there’s a high likelihood that you’re unable to generate the revenue that you were expecting.

You’ll also need to think about the long-term impact on your business, especially if there’s a general downturn in business for a while as the economy recovers from the pandemic.

This impact should be reflected in your cash forecasting models today, by factoring in the expected drops in revenue.

Staying on top of your cash forecasting during these most uncertain times will set you up well for the second recent development you should be aware of: a new auditing standard from the Financial Reporting Council.

Is your business in good financial shape for the coming year?

Historically, an auditor’s job has been to report whether a company’s financial statements are prepared in accordance with an applicable financial reporting framework.

But following the recent high profile failures of Carillion, BHS, and Thomas Cook, FRC’s new ISA (UK) 570 (Revised September 2019) standard adds an extra dimension to the auditor’s role.

Within the audits of financial statements from 15 December 2019, auditors must now report on whether the company in question is a going concern that’s expected to meet its financial obligations. (Download the standard from the FRC)

This places an even greater emphasis on robust, regular cash forecasting.

Get your cash forecasting models into shape

The ground might feel very shaky right now, but to help you lay stronger foundations for your business, and plan for the future with more confidence, watch our FREE Cash Forecasting Webinar.

In this webinar, our Managing Director Stephen Aldridge will explain how to produce a realistic and reliable cash forecast.

You’ll learn:

  • Why cash forecasting is so difficult
  • What drives cash in any model
  • Short-term and long-term cash flow forecasting
  • Problem areas you may come across
  • Techniques that give you a better view of cash


With the constantly changing landscape, you may need to update your model to reflect the government support measures you have adopted. To discuss how you can implement these changes in a robust way, or to get answers to any further cash forecasting questions you have – please get in touch at ku.oc.satiremun@ofni.