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The cash flow chart or forecast is the most important document in small businesses. This allows them to estimate cash flow for the coming months in anticipation of major expenses.

The cash flow chart helps companies to have a minimum level of visibility for the coming months. This is a list of cash receipts and discounts, sometimes with balances at the beginning and end of the month, and sometimes with variations of cash for the month.

We are also talking about a provisional cash flow plan or cash budget. Implementing within the framework of a business-generating plan is not always easy, it will maintain its interest during the process.

It is also of particular importance to companies that have been affected by management closures or are experiencing significant revenue losses. In extreme cases, we remember that a business can be profitable and can be profitable when it is bankrupt due to lack of money.

It can not always reduce the payment terms of its customers or it experiences the difficulties of an important customer on whom it depends.

Only anticipating these risks can establish a cash budget.

Cash Flow Table in Excel Design Download

The cash flow chart downloaded in Excel format usually consists of three distinct parts:

  • Table of cash receipts;
  • Presentation table;
  • Sometimes the VAT budget.

Together, they form the cash level picture that needs to be updated regularly, and this allows the analysis of the gaps between what is planned and what is achieved.

The collection table takes into account income including tax, financial products, contributions (capital, current account), short, medium and long term loans. This is a collection of all cash or credit receipts that can be traced back to the date of collection.

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The presentation table takes into account all expenses that can be budgeted for each month coming back or if they are linked to an opportunity. This is usually the purchase required for operation, staff expenses and social fees, taxes and obligations. We can add dividends, investments, loan repayments and so on.

The VAT budget reflects the presence of taxes dedicated to VAT credit (collection) and VAT (fees) payable.

At the top and bottom of the table are the initial cash balance and the final cash balance for the month.

How to calculate initial cash flow?

Start-up money is not calculated. This is the balance that can be seen in a bank statement at the end of the previous month (or at the end of the year). At the beginning of the process, it will be equal to zero (until the first intake).

Drawing a cash flow chart

The cash flow statement is drawn according to the entry and exit or receipts and discount system. This includes listing all the runs you can expect each month to better deal with the unexpected.

Unlike what happens in the context of the cash flow table and in the balance sheet or provisional income statement, sums always include all taxes or all taxes. The cash flow chart can be drawn over 12 months, weekly or quarterly.

However, setting up a monthly cash flow plan seems to be the most common option. It is the only thing that allows a business leader to know if he can pay a salary each month or repay a portion of his check account without fail.

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Make no mistake, the purpose of this table, like all other budgets, is to make decisions easier.

In this sense, the cash flow chart is a business management tool that allows you to set aside money to face the future in a timely manner.

Cash flow forecasts complete the financial plan by listing income and expenses. Assessing in advance all movements affecting bank accounts during the month or period under consideration then helps to better implement the strategy.

If the cash on hand is not enough to meet the needs, it is possible to look for other sources of finance, which is enough to avoid making payments.

Similarly, if surpluses occur, the company can invest them in the short term, for example.