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CASH FLOW MANAGEMENT
Apredictableandpositivecashflowistheonlywaytobeconfidentthatyourbusinessissucceeding,
andproblemsolvingiscriticaltoenablingahealthycashflow.Unlessyouareawareofwhereyour
realproblemsexist,you’regoingtocontinuefumblinginthedarkforsolutions.Cashflowcanbe
dependentonanumberoffactors,anditisimportanttounderstandtheareasthathavethebiggest
impactfortheleastamountoftime.Establishingeffectivemanagementstrategieswillprovideyour
businesswithasteadyfoundationforapositivecashflow,sothatyoucanfocusonthefutureof
yourbusiness.
EffectiveCashFlowManagementrequires:
x
x
x
x
x
KnowingyourBreakͲEvencashflowposition
Developinga90planforyoursalesandmarketing
Keepinguptodateperformanceinformation
Havingacompletecashflowforecast
WorkingonaPlanBforcashshortfalls
Therearemanyfacetsofcashflowmanagementthatrequireexperienceandknowledgetobeable
tomakechanges,improvements,anddecisionsaroundyourfinancialoperations.Facetssuchas
understandingthatprofitdoesn’tequalcashflowsurplus,theabilitytoimplementplansthatfix
cashflowdeficit,effectivecommunicationwithlendersandsuppliersintheeventofcashflow
challenges,andhowtoplanaheadandadapttotheeverchanginglandscapeofyourbusiness.
Advise the Breakeven Cashflow Calculator is available as a working document by phoning 0800 242 623
This resource has been
kindly provided by
If you have any questions, please call 0800 CHAMBER (0800 242 623).
DATE: MARCH 2015
The Auckland Chamber of Commerce makes all reasonable efforts to ensure that the information published in this resource is accurate and up-to-date. However the matters covered are
subject to regular review and no warranty or representation can be provided regarding the accuracy of such information. The Auckland Chamber of Commerce does not accept liability
for any losses or damage arising directly or indirectly from reliance on the information. www.aucklandchamber.co.nz
JOIN US
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BREAKEVEN CASH FLOW
Havingapositivecashflowisnecessaryforanybusinesstofunctionhealthily,regardlessofwhether
thebusinessisprofitable.Aprofitablebusinessmaynotnecessarilycorrespondtoentirelyhealthy
cashflow,asprofitdoesnotequalcashflowsurplus.Ifyourinflowsarelessthanyouroutflows,you
willfacecashflowchallenges.DeterminingyourBreakEvencashflowisimportantbecauseit
concernstheaccessiblecashinyourbankaccount,andputsyouinapositiontoprogresstowards
freelygeneratingsalesandopportunitiesforyourbusiness.Incalculatingcashinflowsandoutflows
youwillunderstandthecashperformanceofyourbusinessandkeyobstaclestoovercome,tofixa
deficitortogrowcashflow.ABreakEvenAnalysistakesintoconsiderationtheitemsnotinprofit
andlossreports,tocalculateyourBreakͲEvencashflow.
Cashflowincludesthefollowingitemsnotinprofitandlossreports:
x
x
x
x
x
x
x
x
Whencashisreceivedforinvoicing(typicallythefollowingmonth)
Whenpaymentsaremadetosuppliers
Loanrepayments
Increasesinworkingcapitalincludinginventory
Assetpurchases
Ownerdrawingsnotclassifiedassalaryexpenses
Dividends
GST
Asuccinctandcompleteanalysis,factoringinalloverlookedandsometimeshiddencashoutflows,is
theonlywaytodeterminewhenyourbusinesswillbeabletocovercashoutflowsandbeginto
makeasurpluscashflow.Itrequiresasignificantamountoftimeandexpertisetocompletea
thoroughanalysisandunderstandwhatchangesneedtobemadetogenerateahealthyandpositive
cashflowforyourbusiness.
Improveyourfinancialmanagementskillsandmakebetterdecisionstorunyourbusiness.
Understanddifferentaspectsofthefinancialperformanceofyourbusinessandthedriversof
performance
Advise the Breakeven Cashflow Calculator is available as a working document by phoning 0800 242 623
This resource has been
kindly provided by
If you have any questions, please call 0800 CHAMBER (0800 242 623).
DATE: MARCH 2015
The Auckland Chamber of Commerce makes all reasonable efforts to ensure that the information published in this resource is accurate and up-to-date. However the matters covered are
subject to regular review and no warranty or representation can be provided regarding the accuracy of such information. The Auckland Chamber of Commerce does not accept liability
for any losses or damage arising directly or indirectly from reliance on the information. www.aucklandchamber.co.nz
JOIN US
BUSINESS SUPPORT
GLOBAL
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BUSINESS CONNECT
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Call 0800 CHAMBER (0800 242 623)
BREAK EVEN CASH FLOW CALCULATOR
HowtoUse:
PleasemakesureyouhaveyourMacrosenabledͲrefertothe"Notes"tabonhowto
dothis.
FillinthedetailsrequiredintheYellowHighlightedAreas:
Theresultswillthenappearin"CashFlowDeficit/CashFlowSurplus"
ThenCLICKontheBreakevenbuttontoseewhatsalesyourbusinessneedsto
breakeven!
BusinessName:
Current
Annually
Revenue
DirectPayroll
A s r e v e n u e g r o w s , d i r e c t
c o s t s w i l l i n c r e a s e
DirectCosts
OperatingMargin
FixedPayrollCosts
Overheads
$0
F i x e d S a l a r y a n d Wa g e s
O n g o i n g e x p e n s e s o f r u n n i n g y o u r b u s i ness
Interest
Depreciation
ProfitBeforeTax
$0
DoyouhaveTaxLossessavailable?
Z e r o i f Ta x L o s s e s a r e available
Tax
28%
$0
CashProfitAfterTax(excludingdepreciation)
$0
E n t e r a P o s t i v e Va l u e f o r a n I n f l o w / N e g a t i v e Va l u e f o r a n O u t f l o w
OtherCashflowItems
IncreaseinWorkingCapital
CapitalExpenditure
LoanRepayments
D e b t o r s + I n v e n t o r y Ͳ C r e d i t o r s
N e w a s s e t s p u r c h a s e d f o r y o u r b u s i ness
I n c l u d i n g I R D D e b t a n d e x c l u d i n g I n terest
Drawings/Dividends
OtherCashFlow
NetCashSurplus
$0
Advise the Breakeven Cashflow Calculator is available as a working document by phoning 0800 242 623
This resource has been
kindly provided by
If you have any questions, please call 0800 CHAMBER (0800 242 623).
DATE: MARCH 2015
The Auckland Chamber of Commerce makes all reasonable efforts to ensure that the information published in this resource is accurate and up-to-date. However the matters covered are
subject to regular review and no warranty or representation can be provided regarding the accuracy of such information. The Auckland Chamber of Commerce does not accept liability
for any losses or damage arising directly or indirectly from reliance on the information. www.aucklandchamber.co.nz
JOIN US
BUSINESS SUPPORT
GLOBAL
EVENTS & TRAINING
BUSINESS CONNECT
• Benefits
• Find
• Import
• Event
• News
of Membership
• Join Now
Staff
• Business Support
• Mentoring
and Export Services
Calendar
• Event Profiles
• Chamber
Social Media