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Finally, an Easy Way to Project Cash Flow and the Sustainability of Your Business!

Crystel
Business

How many times have you been asked for cash flow projections only to throw something together based on what you think the banker or CPA needs? One time is too many!

If you’re ready to see the future of your business, verify that it’s sustainable, this article is a must read!

While most business owners see cash flow as a daunting process it doesn’t have to be. As a matter of fact, it can be very exciting to see the financial future of your business! Projecting cash flow allows you to see the financial picture, allows you to create a budget, and arrange your ebbs and flows of cash in order to sustain a profitable business. Sounds more exciting now doesn’t it?

Here are a few simple steps to successfully projecting cash flow.

  1. Create an easy to use template. Something as simple as excel can be a very useful tool for projecting. You will need tabs/pages for the following. You may also download a cash flow projection sheet if you’re not the expert in excel.

    1. Cash In (All of your revenue broken into weekly columns)
      1. This will be a weekly forecast of all expected income
        1. Columns
          1. Sources of income such as retail sales
        2. Rows
          1. The week ending date for 3 consecutive months
        3. Cash Out (All of your expenses broken into weekly columns)
          1. This will be a weekly forecast of all expenses
            1. Columns
              1. Sources of expenses such as rent
            2. Rows
              1. The week ending date for 3 consecutive months
            3. Cash Flow Summary (This is the page that calculates a combination of your cash in and cash out tabs.)
              1. Columns
                1. Beginning Cash
                2. Cash In
                3. Cash Out
                4. Available Credit
                5. Available Cash
              2. Rows
                1. Corresponding weeks
  • Let excel do the calculating for you.
    1. Sum each column on the cash in and cash out pages
    2. Connect the corresponding total to the cash flow summary columns

  1. List all of your reoccurring expenses with monthly amounts and due dates. Such as…

    1. Rent
    2. Insurance
    3. Payroll
    4. Marketing
    5. Professional Fees
    6. Dues
    7. Subscriptions
    8. Auto Expense
    9. Loan payments
    10. Owners Draw

  2. List all of your expected revenue with expected amounts and dates of receipts. This can usually be easily found in your accounts receivables.

  3. Enter the data into your template weekly. For example, if your rent is due on the first of every month, enter the total rent due in the first week of every month on your template. In the same manner, enter all of your expenses on their corresponding due dates. Likewise, enter all of your projected income on the dates you expect to receive them.

Viola! You’ve successfully projected cash flow and the sustainability of your business. Well, for the next 90 days. You must continue the process every 90 days. Review, update and manage your cash flow on a weekly basis. Schedule recurring time weekly to do this.  Do you want to take the fast track? Email me at [email protected] for a complimentary cash flow projection workbook!