Simplify Cash Flow Management with These Essential Tools to Build Cash Reserves.

The purpose of this basic cash management tool from BusinessCPR™ is to position you with the ability to anticipate your cash position over the next four weeks proactively.  Click here to download this tool.

Below are the 14 steps for using this cash projection tool:

1. Enter your current bank balance in cell C2.
2. Project your Accounts Receiveable collections by week in cells C4 through F4.
3. Enter any non-Accounts Receiveable expected cash by week in cells C7 through F9.  Reference the source for the cash inflows in cells A7 through A9.
4. Confirm that your projected Operating Cash is Available by week in cells C12 through F12.  Revisit steps 2 and 3 if any cash inflow adjustments need to be made.
5. Project your planned Accounts Payable payments by week in cells C15 through F15.
6. Project your anticipated payroll payouts by week in cells C16 through F16.
7. Project your planned overhead payments by week in cells C17 through F17.
8. Project your standing lease and loan payments by week in cells C19 through F18.
9. Project your planned credit card payments by week in cells C19 through F19.
10. Project in other payments you must make by week in cells C20 through F20.
11. Enter planned savings from your cash inflow you will make by week in cells C2 through F24.
12. Confirm that your projected Cash Outflows by week in cells C24 through F24.  Revisit steps 5 and 11 if any cash outflow adjustments need to be made.
13. If you’re projected cash outflows in cells C25 through F25 are each green—you are good to go. If these cells are red you either need to see how you can increase your cash inflows in steps 2 and 3 or see where you delay payments in steps 5 through 10.
14. In B27 enter the Cash on Reserve target you would like to have to appreciate how well you are building cash reserves or if they are being eroded because too much cash outflow exists for your current sales levels.

Business problems multiply exponentially when you fail to manage your cash. In contrast, disciplined weekly or bi-weekly cash management will position you to anticipate upcoming obstacles to cash flow so that you can make informed decisions. Knowing when cash will be tight allows you to make better decisions on when and how to distribute the cash you have available to fund your core business operations.

If, after completing your cash projections for the next four weeks, you find yourself with more questions than answers, click here to talk with a certified BusinessCPR™ Cash Management to get your answers.