Accounting services
Cashflow forecasting for garages and dealers
Motor Trade Accounting helps garages, dealers and motor businesses across the UK build cashflow forecasts that show what is coming before it hits the bank. Plan stock buying, tax bills and investment with a clear view of the months ahead.
Why cash planning matters so much in the motor trade
Plenty of profitable motor businesses run short of cash. A dealer can make a healthy margin on every car and still struggle if too much money is tied up in stock, or if a VAT quarter, a corporation tax bill and a stocking finance curtailment payment all land in the same month. A workshop can be busy and still feel squeezed when trade accounts are slow to pay and parts suppliers want settling on time.
A cashflow forecast is a week-by-week or month-by-month projection of the money coming in and going out of the bank. Unlike a profit and loss account, it follows the timing of payments, not the timing of sales. That makes it the most practical tool for deciding when to buy stock, whether you can afford new equipment or another technician, and how much headroom you have before an overdraft or facility limit.
A specialist motor trade accountant builds the forecast around the patterns of your trade: busy plate-change months, quieter winter periods for sales, MOT peaks, insurer payment terms for body shops and the timing of finance company settlements on vehicles sold on credit. The forecast is then compared with what actually happened, so it gets more reliable over time.
What a cashflow forecast can cover
The forecast is shaped around your business and updated as things change.
- Receipts by sourceRetail sales, trade sales, finance company settlements, workshop takings, insurer payments and trade account receipts, each with realistic timing.
- Stock purchasingPlanned vehicle and parts buying, so you can see how much stock the business can carry without stretching cash.
- Tax paymentsVAT, PAYE and National Insurance, corporation tax and self assessment payments placed on the dates they actually fall due.
- Finance commitmentsStocking plan interest and curtailments, loan repayments, leases and hire purchase on equipment or vehicles.
- Overheads and wagesRent, utilities, insurance, software, wages and directors' drawings or salary.
- ScenariosWhat happens if sales slow, a big customer pays late or you take on a new site, shown side by side.
- Actual against forecastRegular comparison of the forecast with the bank, with the differences explained and the forecast rolled forward.
What to plan before building a forecast
Good forecasts start from good information. These are the things worth gathering first.
Your current position
Bank balances, facility limits, money owed to you and money you owe, all at the same date, give the forecast a reliable starting point.
Known commitments
Gather loan agreements, stocking plan terms, lease schedules and any tax payment plans so their dates and amounts are captured.
Trading patterns
Last year's monthly sales and costs show the seasonal shape of your business, which the forecast should reflect.
Plans for the year
New staff, equipment, premises or a change in the mix of vehicles you sell all change the cash picture and should be built in.
Good to know about cashflow forecasts
Profit is not cash
Stock bought, VAT collected for HMRC and loan capital repayments all affect cash without showing up as costs in your profit.
VAT money is not yours
VAT collected on sales belongs to HMRC until the return is paid. Setting it aside or seeing it clearly in the forecast avoids a shortfall.
Lenders value a forecast
Banks and finance providers often ask for a forecast when you apply for or renew a facility, and a credible one strengthens the conversation.
HMRC can agree payment plans
If a tax bill cannot be paid on time, HMRC may agree a Time to Pay arrangement. Contacting them early, with a forecast, gives the best chance.
How it works
- 1
Tell us about your business
Use the enquiry form to explain your trade, your size and what is worrying you about cash.
- 2
Gather the information
A specialist motor trade accountant asks for your recent figures, commitments and plans.
- 3
Build the forecast
A forecast is built for the period that suits you, with the assumptions written down so you can see where each figure comes from.
- 4
Review and roll forward
The forecast is checked against your bank regularly and updated, so it stays useful rather than going out of date.
Questions about cashflow forecasting
How far ahead should a forecast look?
Twelve months is common, with the first few months in more detail. Some dealers also keep a short weekly forecast for the next quarter.
Is a forecast the same as a budget?
Not quite. A budget sets targets for income and costs, while a cashflow forecast follows the timing of money in and out of the bank. Many businesses use both.
Can a forecast help with stocking finance?
Yes. It shows how much stock you can carry, when curtailment payments fall and whether your facility limit is enough for the year ahead.
What if my figures change every week?
That is normal in the motor trade. A rolling forecast that is updated regularly copes with change far better than a fixed annual one.
Can you help me prepare for a meeting with my bank?
A specialist accountant can prepare a forecast and the supporting figures a lender usually asks for, and explain the assumptions behind them.
Who do I speak to?
Your enquiry goes to a qualified accountant who works with motor trade businesses and understands how cash moves through a garage or dealership.
Plan your cash with confidence
Tell us about your business and a specialist motor trade accountant will talk you through a forecast built around your trade.