![]() ![]() Total sources of cash: Add the amounts in the “Operating cash, beginning” row to the amount in the “Sources of cash” for each month.Sources of cash: All money coming in each month (receivable collections or direct sales, loans, etc.).Operating cash, beginning: The amount of money you’ll have at the beginning of each month.Then, in another column on the left-hand side, list the following cash flow categories and enter the appropriate amount in each column for each month (see descriptions below): ![]() To get started, create 12 columns across the top of a spreadsheet, representing the next 12 months. ![]() With these realistic assumptions in hand, you can begin drafting your cash flow projection. Only the most likely numbers should appear on your spreadsheet. For example, if your vendors require payment within 2 weeks of delivery, a key assumption could be: Payables are due within 14 days of purchase.ĭon’t let optimism factor into your key assumptions. Payables: These assumptions should outline when your payments are due.For example, if most of your customers pay you within 30 days, a key assumption could be: 90% of sales will be collected the month after the sale. Receivables: These assumptions should outline how quickly you receive payment from your customers.Key assumptions should relate to two primary areas: Fortunately, spending less than an hour each month on a cash flow projection can help you identify potential cash shortfalls in the months ahead.īefore you create a cash flow projection for your business, it’s important to identify your key assumptions about how cash flows in and out of your business each month. In less than an hour a month, you can identify potential cash shortfalls - and surpluses - in your business’s future.Įven businesses with healthy growth and strong sales run the risk of owing more than they can pay in a given month. ![]()
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