Professional Documents
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Once you have determined your operating costs and expenses and estimated your sales, you should know whether your idea is feasible and viable for you. Now you have to calculate these sales and expenses for each month of the year. A cash flow projection or statement often looks intimidating but is simply an illustration of how your sales and expenses will occur throughout the year. It is an essential planning tool for you to determine those months where you may have cash shortages and therefore you must plan and save for these months or obtain a line of credit or overdraft. A cash flow statement is also essential if you are obtaining financing from a bank, credit union or government program.
Rates
TOTALS PROJECTED
Projected Mon 1
Projected Mon 2
Projected Mon 3
Projected Mon 4
Projected Mon 5
Projected Mon 6
Projected Mon 7
Projected Mon 8
Projected Mon 9
Projected Mon 10
Projected Mon 11
Projected Mon 12
TOTALS PROJECTED
CASH RECIEPTS: Cat 1 Cat 2 Cat 3 Cat 4 TOT. CASH RECIEPTS C of G Cat 1 COG Cat 2 COG Cat 3 COG Cat 4 COG TOTAL COST of SALES GROSS PROFIT OPERAT. EXPENSES Advertising/Donations Bank Charges/CC Exp Loan pmt 1 Office & Supplies Professional Fees Utilities Repairs & Maint. Telephone Travel Taxes Dues & Subscriptions Misc. Employee Salaries TOTAL DISBURSED NET CASH Owner Draw NET CASH SURPLUS per month
Total SALES Minus Equals Cost of Goods Sold Profit Margin/Gross Margin =
Gross Profit pays the operating costs, expenses, wages, loan payments, etc. Gross Profit Margin Minus Minus Minus Minus Equals Occupancy Costs Personal Costs General/Office Costs Loan Payments Net Profit = $___________________ $___________________ $___________________ $___________________ $___________________ $___________________
Net Profit pays for income taxes, owner drawings, depreciation, new assets, etc.
CASH RECEIPTS Cash Sales Collection of Accounts Receivable Loan Proceeds Other Cash Total Cash Receipts A
1st Month
2nd Month
3rd Month
4th Month
5th Month
6th Month
7th Month
8th Month
9th Month
10th Month
11th Month
12th Month
CASH DISBURSEMENTS Purchase of Materials or Stock Purchase of Fixed Assets Accounting and Legal Fees Advertising Vehicle Expense and Travel Business Tax, Fees, Licenses Property Tax Management Salaries Other Salaries and Wages Employee Benefits Rent Insurance Interest and Bank Charges Payment on Loans/Mortgages Maintenance and Repairs Freight Telephone Utilities Office Expenses and Postage All Other Operating Expenses Income Tax Payments Total Cash Paid Out Cash Surplus Or (Deficit)-(A-B) Opening Cash Balance-C Closing Cash Balance-D Note: Line "C" is a carry: forward from line "D" in previous month Travel & Meals Equip. Maintenance Furn/Fixtures/Tools Dues & Subscriptions LOAN PAYMENTS Other Sub-total TOTAL EXPENSES NET SURPLUS B
The 80/20 Rule: There is a general rule that states 20% of sales come from 80% of your customers and 80% of sales come from only 20% of your customers. Identify these select customers and build their relationship. Discover the reason why the others do not purchase more from you. Use a Company Credit Card: This is an easy way to get 30 days interest free. Reduce Prepaid Expenses: Dont let too much of your money get tied up. Supplier Discounts: Many suppliers will offer you significant discounts for early payment.
See whether it even pays to borrow money to take a discount.
Separate Accounts: Create a separate account for payroll and tax contributions and make
monthly deposits into it. This will allow you to pay them without straining your cash flow.
Shop Around: Why pay more than you have to? Beware of long term. Manage Payments Wisely: Of course you must pay suppliers on time but it is wise to take
full advantage of the credit terms offered to you. If payment is due in 30 days dont pay in 15 days. Periodically seek extensions in the credit terms.