Capital is the lifeblood of any manufacturing business. Each
week, your payroll must be met, overhead covered and suppliers
paid. Meanwhile, your plant's customers might not pay on time
— or in full — and unanticipated expenses may come up,
straining your cash flow. Cash flow forecasting can help
eliminate much of the heartburn associated with managing a
manufacturing facility's day-to-day capital.
Applying the following best practices can help you eliminate
much of the heartburn associated with managing your manufacturing
facility's capital and help keep your cash flow positive.
Identify Your Peak Needs
Most manufacturing businesses are cyclical and their cash flow
needs may vary by month or season. Preparing a monthly forecast (or
at least a quarterly forecast) is essential — an annual plan
will not work as trouble can arise when an annual budget does not
reflect the cycle of the business. For seasonally focused
operations, annual forecasts are not specific
