'A surprising number of commentators thought Finance Minister Pravin Gordhan's latest budget was good and well-balanced,' writes columnist David Gleason on Business Day Live.
But 'quite how anyone can arrive at that conclusion when the government intends spending nearly 6% more than its revenue, beats me,' he adds.
It just goes to show you that even government gets it wrong when working out how much cash flow it needs to pay its day-to-day expenses.
That's why it's so important for you to do a liquidity test for your company to ensure your cash flow isn't negatively affected when you enter into large business transactions like declaring a dividend for shareholders or merging with another company.
Here's what you need to know to perform a liquidity test…
Cash flow forecast – the best way to work out your company's liquidity…
'Creating a cash flow forecast is really the only way you can see if your company's liquid has enough cash to pay its day-to-day expenses,' explains Douglas Taylor in the Practical Accountancy Loose Leaf.
After all, your company's 'financial statements don't show which assets can be readily turned into cash and at what cost, or when you can expect to get more cash. Only a cash flow forecast can tell you this,' he adds.
And remember, cash flow problems don't just happen. They're a while in coming and can be anticipated and prevented if you take the trouble to plan for them. So do a cash flow forecast today to ensure you don't get caught with too little money in your account.
For more information on how to set-up a budget cash flow get your hands on the Practical Accountancy Loose Leaf. In the Practical Accountancy Loose Leaf we've got a dedicated chapter on budget cash flows. In it you'll discover: