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Cash Flow Modelling

In many ways, when you become a Trustee and are looking after the finances and assets of a beneficiary, it’s almost like running a business. You need to know what money is coming in, what money going out, what profits are being made from any investments and what your financial forecast is.

  • What is cash flow modelling?
  • Why should a Trustee have a cash flow model?
  • Why would you need a professional to prepare a cash flow model?
  • How can Adroit Financial Planning help?

What is cash flow modelling?

Cash flow modelling helps to forecast how long funds will last when they are needed to maintain the requirements of the beneficiary. To enable you to do this, the key is to plan ahead.

Cash flow modelling takes into account the Trust’s finances and includes all known income and outgoings. It can assume certain rates in terms of inflation and investment returns and therefore helps look at various possible scenarios. In short, it gives you an excellent idea on how much income can be generated and for how long. It’s an exercise which needs to be repeated in order to take into account any changes in circumstances.

Basically, by having a cash flow model, you’ll be in control of the finances and will be able to run accounts confidently.

Why should a Trustee have a cash flow model?

Although it’s not an essential part of a Trustee’s role to have a cash flow model, most Trustees find it’s an extremely useful tool. It helps them to understand what level of risk and return is needed and how long an income can be realistically sustained.

Looking after the finances of someone you care for can be a worrying task. Having a cash flow model to follow provides most Trustees with the security to help relieve any additional stress.

Why would you need a professional to prepare a cash flow model?

You don’t need a professional to prepare a cash flow model for you. However, most Trustees prefer a professional to prepare a cash flow model as it provides them with reassurance that absolutely everything has been taken into account.

Professionals will take time over researching the various cash flow software options before deciding which one is best suited for their clients’ needs.

How can Adroit Financial Planning help?

Adroit has been preparing cash flow models for Trustees for many years and has a significant amount of experience in this area.

We’ll work closely with you to ensure we have a clear understanding of your future plans and use sophisticated modelling software to ensure you reach your goal.

We’ll also revisit the cash flow modelling process regularly to ensure that the strategy is up to date and you get the very most out of it.

Should you require advice from one of our experts, please contact a member of our team on 0800 884 0006 or using the form below:

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