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Revenue BridgeFinancial Management · Advisory

Strategic cash flow planning

Strategic Cash Flow Planning

Tracking your cash flow history to forecast your financial future. Profitable businesses still run out of cash. Answer 20 questions across five areas of your cash flow and see where your business stands, from Cash Fortress to Critical Cash Depletion.

Start the cash flow diagnostic

Revenue Bridge is a firm of accountants. We prepare budgets, forecasts and tax plans; we do not provide investment advice or arrange finance.

Revenue Bridge is not a Financial Services Provider (FSP) or credit broker. We simply provide financial readiness packages.

Where cash flow usually breaks down

Profitable businesses still run short of cash when the basics are missing:

  • No budget, or a budget nobody compares with actual results.
  • Customers paying late while suppliers expect payment on time.
  • No cash reserve, so the overdraft funds day-to-day costs.
  • Prices that have not kept up with costs.
  • Provisional tax and VAT payments that arrive as surprises.

Each of these can be planned for. That is our work.

What lenders typically ask for

Sound cash flow planning usually rests on:

  1. A 13-week rolling cash flow forecast, updated every week
  2. An annual budget, compared with actual results every month
  3. Current management accounts and annual financial statements
  4. A debtors and creditors age analysis
  5. A tax calendar covering provisional tax, VAT and PAYE
  6. A schedule of all business debt and repayments

We build and maintain each of these with you, from your own records.

How we strengthen your cash flow planning

  1. Step 1

    Assess

    We review your bank statements, SARS profile and CIPC status.

  2. Step 2

    Map

    We set out what is missing and what each item will take to fix.

  3. Step 3

    Reconcile

    We bring your books up to date and separate business from personal spending.

  4. Step 4

    Prepare

    We build your budget, cash flow forecast and tax calendar from your actual results.

  5. Step 5

    Submit

    We file outstanding returns with SARS and CIPC and hand you a complete document pack.

  6. Step 6

    Respond

    If a lender asks questions about your financials, we help you answer them.

The three areas we fix

Company compliance

CIPC annual returns and company records kept current, so nothing interrupts your plans.

Tax compliance

Provisional tax planning, VAT and PAYE on time, and a compliant Tax Compliance Status PIN.

Accounting and bookkeeping

Cloud accounting, monthly management accounts, budgets and cash flow forecasts.

See all our services

Which route fits you?

RouteYour situationWhat we do
A: Submission PackCompliant, with current financialsBuild your budget, forecast and tax calendar
B: Accounting CleanupRecords are behind or incompleteReconcile and rebuild your books, then build your plan
C: Compliance OverhaulSARS backlogsRestore tax compliance first, then routes B and A

Cash flow diagnostic

Strategic Cash Flow Planning

Tracking your cash flow history to forecast your financial future. Answer all 20 questions in five parts. Choose the answer closest to your business today.

Part 1: Cash Inflows & Future Revenue Predictability

1. Invoice-to-Cash Lag (True Days Sales Outstanding)

How long does it usually take from sending an invoice to having the cash in your bank?

2. Customer Concentration Cash Risk

If your biggest customer stopped paying or left tomorrow, what would happen to your cash?

3. Future Revenue Predictability

How much of next month's income is already secured by contracts, retainers or subscriptions?

4. Milestone & Progress Billing Gaps

How do you usually bill customers on projects or larger jobs?

5. Historical Collection Leaks (Bad Debt)

Over the past year, roughly how much of what you invoiced was never collected?

Part 2: Cash Outflows & Fixed Cost Commitments

6. The Fixed Expense Cash Floor

How much of the cash leaving your business each month goes to fixed costs such as rent, salaries and loan repayments?

7. Supplier Credit Alignment

What payment terms do your main suppliers give you?

8. Vendor Concentration Risk

If your most important supplier raised prices sharply or stopped supplying you, what would happen to your cash?

9. Hidden Cash Bleeds & Budget Variances

Over the past six months, how did your actual spending compare with what you planned?

10. Debt & Vehicle Finance Cash Drain

How much of your monthly incoming cash goes to loan, overdraft and vehicle finance repayments?

Part 3: Working Capital & Trapped Liquidity

11. Inventory Cash Lockup (For product/stock-based businesses)

On average, how long does stock sit before it is sold?

12. The Structural Cash Timing Mismatch

Do you have to pay suppliers before your customers pay you?

13. Unbilled Work-in-Progress (WIP) Strain

How much completed work is usually waiting to be invoiced?

14. True Trapped Capital Value

Where is most of your business's working capital right now?

Part 4: Future Predictive Cash Planning & Runway

15. True Cash Runway Visibility

If no new sales came in, how long could your current cash cover your costs?

16. Cash Buffer vs. Tax Obligations

How do you set aside cash for VAT, PAYE and income tax?

17. Credit Facility & Overdraft Reliance

How often do you use an overdraft or credit facility to cover normal running costs?

18. Future Capital Expenditure (CapEx) Planning

How will you pay to replace key equipment, vehicles or systems over the next few years?

Part 5: Cash Governance, Visibility & Controls

19. Financial Velocity & Reporting Speed

How soon after month-end are your books and management accounts up to date?

20. Future Rolling Cash Flow Forecasting

How do you forecast your cash flow?

Check your financial position

Three calculators every plan should answer: what the business is worth, what debt it could carry, and what it owes against what it owns. Tick "Include these results" on any calculator to add it to your readiness check.

How much cash is trapped in slow collections?

Guideline days to pay
50 days
Your days to pay
72 days
Days slower than guideline
22 days
Estimated trapped cash
R723 288

Collecting at the professional services guideline of 50 days could release about R723 288 into your bank account.

Professional Services guideline figures: debtor days 50, stock days 0, creditor days 20, cash conversion cycle 30 days.

Credit sales are sales your customers pay for later, on account. Days to pay (debtor days, or DSO) is roughly money customers owe you ÷ annual credit sales × 365. Sector figures are Revenue Bridge guideline figures for South African businesses, not official statistics.

Sell now, in 5 years or in 10 years?

Sell now

R4 800 000

value in today's Rands

Sell in year 5

R7 257 060

value in today's Rands

Cash collected R4 422 708 (today's value) + sale price R7 052 775 in year 5

Sell in year 10

R8 707 929

value in today's Rands

Cash collected R7 034 273 (today's value) + sale price R10 362 840 in year 10

Highest value on these inputs

Value of keeping the business (DCF)
R9 963 172

Free cash flow is the cash the business generates after operating costs, tax and reinvestment. The discount rate is the yearly return you or a buyer would expect for the risk; owner-managed businesses often use 18% to 25%. The sale price uses your exit multiple of that year's free cash flow.

How much funding could your profit support?

Profit margin
15.0%
Current repayment cover
7.50×
Room for new repayments
R100 000 a month
Estimated funding capacity
R4 419 831

Profit means operating profit before interest, tax, depreciation and amortisation (EBITDA). Many lenders want profit to cover all loan repayments about 1.25 times or more. Business lending rates are usually above prime.

What the business owes versus what it owns

What the business owes

What the business owns and is owed

Debt-to-equity: 1.32×Under 1× is generally seen as conservative; above 2× as highly geared.
Current ratio: 1.73×Short-term assets ÷ short-term debts. 1.5× or more is a common comfort level.
Quick ratio: 1.40×Cash and money owed to you ÷ short-term debts. Below 1× means you rely on selling stock to pay bills.
Total owed
R1 650 000
Total owned and owed to you
R2 900 000
Net worth (equity)
R1 250 000

Estimates only, based on common lender guidelines. Lenders apply their own affordability assessment under the National Credit Act, their own rates and fees. This is not a credit assessment or an offer of finance. These figures are not a formal business valuation.

Take the cash flow diagnostic

Frequently asked questions

What does the cash flow diagnostic measure?

Twenty questions across five areas: cash coming in, cash going out, working capital, cash runway and how well cash is tracked. Each answer scores 1 to 4, for a total out of 80 and one of four tiers, from Cash Fortress to Critical Cash Depletion.

What is trapped cash?

Cash your business has earned but cannot use yet, because it is sitting in unpaid customer invoices, slow-moving stock or work you have not invoiced. Profitable businesses with trapped cash can still run short.

What is a 13-week rolling cash flow forecast?

A week-by-week view of the cash you expect in and out over the next three months, updated every week with actual figures. It shows a shortfall early enough to act on it.

What are debtor days?

The average number of days your customers take to pay you. Every day above the norm for your sector is cash sitting in someone else's bank account.

How big should a cash reserve be?

A common guide is at least three months of fixed costs. The right level depends on how predictable your income is.

What is provisional tax?

Provisional tax is income tax paid in advance during the year by companies and by individuals with income that is not fully taxed through PAYE. Planning for it avoids penalties and cash shocks.

How often should I compare actual results with my budget?

Monthly. It is the quickest way to spot problems while there is still time to act.

Do you give investment or financial product advice?

No. We are accountants, not a registered financial services provider. We help with budgets, forecasts, tax planning and records, not investments or financial products.

How long does it take?

It depends on your route. With current records (Route A), your budget and forecast can be built quickly. Backlogs are resolved first.

Revenue Bridge is not a Financial Services Provider (FSP) or credit broker. We simply provide financial readiness packages.

Revenue Bridge provides accounting, tax and company compliance services. We are not a registered financial services provider or credit broker, and we do not provide investment advice or recommend financial products. Calculator results and scores are estimates, not a formal valuation or credit assessment.

Know where your cash is going before it goes.

The cash flow diagnostic scores your business out of 80 across five areas and shows which of four cash tiers you are in.

Start the cash flow diagnostic