Annual Cash Flow Fluctuations

Annual Cash Flow Fluctuations | Accountants Bayswater | TAS

The Reasons Behind Annual Cash Flow Fluctuations...

While profit is excellent to have, it is cash flow that is the true king of business. During the holiday season and after, business owners should take some time to reflect on the past year to understand what has worked and identify areas that need improvement.

With this in mind, solid sales plans can be made for the next 12 months.

The aim is to manage seasonal fluctuations and maintain positive cash flows throughout the year. Once businesses have clearly identified their yearly peaks and lows, they can create a stock management guide.

Prior to beginning the planning process, business owners will need to analyse what has worked well in the past.

Compiling and then using accounting information from each month in the previous year will aid this.

The following are considerations in developing a seasonal management plan.

Managing Season Demand

For businesses that have a peak period, managing inventory becomes a demanding and time-consuming task. Without careful planning, inventory can get out of line, resulting in heavy markdowns due to overstocks and serious cash flow problems.

Marketing Plan

In addition to advertising and direct mail, the Internet has opened up a wealth of new ways to reach customers. Keeping a manageable list of customer emails allows businesses to regularly inform their customers about promotions, new stock or general changes to the business.

Differentiate Your Business

One common issue for many small businesses is how to remain competitive with national chains. Small business owners should ask themselves, “What makes me distinctive? What do I offer that they do not?” Often the level of service provided by small businesses is what makes them more attractive to customers.

Hours and Staffing Levels

Determine the need for seasonal staff. Work with staff to stagger schedules so that the business is fully operational during peak periods, which may involve more nights.

Review the previous Year’s History

Make allowances and adjustments for unusual events, such as weather and one-off promotions. Based on current market share, make profit estimations taking into account the busiest and slowest periods.

Thank you for reading!
Should you have any queries in regards to the above please contact our office on (03) 9728 1448

The TAS Team
3/653 Mountain Highway, Bayswater VIC 3153

Dorothea Farmakis (CPA)


Dorothea, our CPA Qualified Accountant (Registered Tax Agent), has over 25 years experience within international corporate firms in Accountancy, Funds Management and Asset Management for firms such as HSBC, P&O, Lend Lease and more.




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