Cash Flow Projections

Nick Swedberg

Many business owners don’t feel they have time to do cash flow projections.  This is a very important tool for all business owners to have.  It is a tool that could mean the difference between going out of business or staying in business.  It does take some time to set up a template to suit your business, but once set up, it will be one of the most used tools for a business owner or accountant.

If a budget has been prepared, there will be a starting place to come up with the estimated earnings and expenses.  If a budget has not been created, a schedule of expected earnings should be created.  This schedule should include the money owed to a business by their customers and an estimate of when the payments will be received.

For the estimated expenses, the budget will be a great tool as well.  If a budget has not been created, setting up a schedule of payments by vendor showing the amounts owing, payment frequency and due date will be helpful.

A program that works well for the cash flow projection worksheet is Excel.  You will want to create columns that list each day, week, month, quarter or year.  In the rows, you will list the beginning cash, all cash in-flows on separate lines and all cash out-flows on their own lines.  After adding the cash in-flows and subtracting the cash out-flows, you will know what your projected cash on hand will be either on a daily, weekly, monthly, quarterly or yearly basis.

Taking the time to prepare your cash flow projection will provide you with a tool to keep an eye on your company’s numbers….and to attempt to keep them where they should be!


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