Cash
Twelve months of cash, on one page.
Profit and cash aren't the same thing, and the gap between them is where companies die. Most people start by searching for a cash flow template. This is one you don't fill in by hand. It answers the only question that matters: what's in the account at the end of each of the next twelve months.
Build this forecast with the opening cash and fixed costs below already in, or fill in your twelve months first.
Fill in what comes in, what it costs you to deliver it, and what you spend to keep the lights on. Then add the one big cost you already know about, the deposit or the equipment or the trade show. Put it in the month it's due.
The month to watch is the low one. That's the month you need the money for, and it's almost never the last row on the page.
Your twelve months
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| Month | Opening | In | Out | Closing |
|---|
Your lowest month
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What the rows are doing
Money in is your revenue for the month. Money out starts with what it costs to deliver that revenue, which is whatever the gross margin leaves behind. Then it adds your fixed costs, and the one-off in the month you put it. Closing cash is opening plus in less out, and it becomes the next month's opening.
That last part is the whole reason a forecast is a table and not a single number. A bad month doesn't end in that month. It sets the floor for every month after it.
What the full model adds
- Money in isn't the same as money billed. The model holds your receivable days, so a customer who pays in thirty days shows up in your cash a month after the sale.
- Costs you can pay later sit in payables on the terms you actually have. Payroll comes out in the month it's earned, because that's how the two really behave.
- A loan splits itself into interest on the income statement and principal against the balance, month by month, without you doing it by hand.
- A line of credit can be told to hold a cash floor. It draws when a month would go under it and repays when the cash comes back.
Building the model is free. Saving it to your account, the Excel workbook with a monthly sheet behind the statements, and the print pack are on a paid plan. The pricing page lists what comes with each one.
A forecast looks forward. The statement of the same name looks back, and how to read a cash flow statement walks through one line by line.