Forecasting Cash Flow

If projected Ending Cash is negative at any point in the future,
do something about it NOW!!

Instructions (Period = week)
  • At the “CASH BALANCES” window, enter the first day of the current¬† period at the “As of” cell using the format MO/DAY/YR¬† ¬†(08/01/XX)
  • Enter names and balances for all Checking and Savings accounts.¬† If applicable, also identify Other Cash available.
  • Totals will be calculated automatically and transferred to other sections of the worksheet.
  • Go to the “Six-Week Cash In from Projects” section.
  • Current Projects:
    • Enter at “Project Name” the names of Projects currently under construction.
    • At “$ Remain”, enter the amount remaining on the construction contract.¬†
    • Enter the cash flows expected from those projects in the appropriate weekly periods.
  • Prospects:
    • Enter at “Prospect Name” the Projects projected to start in the next six periods.
    • At “Estimate $”, enter the estimate amount.
    • Enter the cash flows expected from those projects in the appropriate weekly periods.
  • Totals are automatically entered in the summary sheet.
  • The “Revenue Funnel” sums the potential revenue available from contracted jobs and strong prospects.
  • Enter the amount of current Accounts Receivable you expect to receive in this and in the coming weeks.
  • Enter any anticipated proceeds from the sale of an asset.
  • Enter any capital to be contributed by the Owner.
  • Enter any anticipated proceeds from loans or lines of credit.
  • Enter Current Accounts Payable.
  • Enter Cost Of Goods Sold (COGS) as a percentage of revenue.¬† This number should be available on P&L statement or can be calculated by dividing COGS by Revenue.
  • Enter the percent of invoiced COGS that will be paid this period.¬† Default is 25%.
  • The total of the Accounts Payable will be entered in the current period by default.
  • ¬†Enter the amount of Accounts Payable you expect to pay in the next periods in the out-period spaces.
  • The amounts you enter will be deducted from the initial period Accounts Payable total.
  • Enter Payroll for each period.
  • Enter all Other Expenses. Use the General and Administrative (G&A) section of the P&L statement. Do not include Payroll and Loan Payments, which have their own entries.¬† This number should be relatively static, so extend to all six periods.¬† Add or subtract if you know any period is going to be unusual.
  • Enter the cash required for any anticipated asset purchases. If you are financing a purchase (like a truck), only enter the down payment.
  • Enter any anticipated withdrawals by the Owner.
  • Enter the total of all periodic payments to Lenders.
  • This line shows the weekly performance of the cash accounts.¬†¬†
  • It measures the net cash flow for the period.
  • This line shows a projection of the balance of the cash accounts at the end of the weekly period.
  • You are watching for negative balances and should act when a negative balance is projected.
  • You can:
    • Slow down the payment of Accounts Payable;
    • Delay regularly scheduled payments;
    • Accelerate Accounts Receivable;
    • Increase Owner’s Contribution, or Additional Paid-In Capital, if resources are available;
    • Increase borrowings on established lines of credit;
    • Set up new loans with lenders.