Cash flow is lifeblood of your practice

Cash is vital to all firms, but some private practices are not doing enough to ensure their business is operating at optimum health. Without a healthy cash flow in your business, you could face problems paying staff, taxes, overheads and fall short of paying yourself a salary. Susan Hutter sets out some useful pointers

Forecasting

Make sure you prepare by having a simple annual forecast of income and expenditure, which is then updated when the actual figures are available and/or when things change.

Forecasting expenditure is relatively easy, as most consultants know what their practice overheads are and the date when payment needs to be made. Imp­ortant dates to bear in mind include PAYE tax – which is due on the 19th of the month following the salary payment.