Liquidity planning in the 1st year
Why is liquidity planning important?
Liquidity planning records all of a company’s cash flows in a given period. Its purpose is to assess the solvency of a company and to ensure this solvency in the future. Or simply put, liquidity planning can be used to assess whether there is enough money to pay the bills. Lenders can see from the liquidity planning whether the company will have sufficient liquidity in the future to repay a granted loan. Furthermore, planning influences all entrepreneurial decisions, such as investment decisions or personnel planning.