At Profit Soup, we’ve always been big fans of cash flow forecasting. That’s why we’ve developed new (free) weekly and monthly cash flow workbooks for planning your cash and financing needs.
The Covid-19 crisis makes cash flow planning much more challenging – though the need for it is greater than ever. We no longer have the option of flying blind.
Picture yourself driving down a curvy road at break-neck speed, with a dirty windshield. That’s what running your business is like now. Take a minute or two to pull over and squee-gee off your windshield to get a decent view. The road is still full of unforeseen hazards, no doubt. But the ability to see the curve ahead and make adjustments before you reach them gives you a distinct advantage. You’ll have a fighting chance to navigate the turn and keep going down the road to the next one (and the one after that and so on), adjusting and recalibrating along the way.
With a cash flow forecast in hand, you can:
- Visualize multiple possibilities, evaluating potential cash requirements given different sales estimates
- Prioritize spending and make essential staffing decisions
- Calculate how grants and emergency loans can impact cash and your ability to retain staff
- Quantify the cash impact of changing your receivables collection and inventory management
- Estimate how much short-term credit you will need and when you can pay it back
- Determine if and when your cash reserves and credit line will run out, and take appropriate action before it happens
- Communicate effectively with your banker and suppliers
New Cash Flow Planners
To help, Profit Soup has created two Excel Workbooks: one to help you to build a rolling 13-week plan and another for building a rolling 12-month cash plan. There are two versions of each Workbook :
- One with sample data so you can see a complete plan.
- One blank – so you can enter your own data and build your company’s cash flow forecast.
Which Workbook Should You Use?
If you are in a “cash critical” situation, we recommend using the 13-week workbook to forecast your weekly cash flow. If you are comfortable that your cash reserves and credit line are sufficient to get you through at least 2 months, the Monthly Workbook is probably sufficient.
Each workbook contains instructions. While it should go without saying that you need to read them, well… Whichever workbook you use, review the sample data version first as you go through the instructions. You can even play with the assumptions to see how changing sales, expenses, collections and inventory management impact the cash flow and financing needs for our sample company.
Then, gather your own information and build your own cash flow plan. You’ve got this! As always, let us know how we can help.
Workbooks for Download: