How to write a monthly cash flow projection

  1. 1. Cash on hand (beginning of month) -- Cash on hand same as (7),
  2. Cash position, pervious month
    3.
  3. 2. Cash receipts-
    1. Cash sales-All cash sales. Omit credit sales unless cash is actually received
    2. Gross wages (including withdrawals)-- Amount to be expected from all accounts.
    3. Loan or other cash injection-Indicate here all cash injections not shown in 2(a) or 2(b) above.
  4. 3. Total cash receipts (2a+2b+2c=3)
  5. 4. Total cash available (before cash out)(1+3)
  6. 5. Cash paid out -
    1. Purchases (merchandise)--Merchandise for resale or for use in product (paid for in current month).
    2. Gross wages (including withdrawals)--Base pay plus overtime (if any)
    3. Payroll expenses (taxes, etc.)-- Include paid vacations, paid sick leave, health insurance, unemployment insurance, (this might be 10 to 45% of 5(b))
    4. Outside services-This could include outside labor and/or material for specialized or overflow work, including subcontracting
    5. Supplies (office and operating)--Items purchased for use in the business (not for resale)
    6. Repairs and maintenance-Include periodic large expenditures such as painting or decorating
    7. Advertising-This amount should be adequate to maintain sales volume
    8. Car, delivery and travel-If personal car is used, charge in this column, include parking
    9. Accounting and legal-Outside services, including, for example, bookkeeping
    10. Rent-Real estate only (See 5(p) for other rentals)
    11. Telephone
    12. Utilities-Water, heat, light and/or power
    13. Insurance-Coverage on business property and products (fire, liability); also worker's compensation, fidelity, etc. Exclude executive life (include in 5(w))
    14. Taxes (real estate, etc.)-- Plus inventory tax, sales tax, excise tax, if applicable
    15. Interest-Remember to add interest on loan as it is injected (See 2© above)
    16. Other expenses (specify each)

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Unexpected expenditures may be included here as a safety

factor________________________________________

Equipment expenses during the month should be included

here (non-capital equipment)__________________________

When equipment is rented or leased, record payments here

  • (q) Miscellaneous (unspecified)--Small expenditures for which separate accounts would be practical
  • (r) Subtotal-This subtotal indicates cash out for operating costs
  • (s) Loan principal payment-Include payment on all loans, including vehicle and equipment purchases on time payment
  • (t) Capital purchases (specify)--Nonexpensed (depreciable) expenditures such as equipment, building purchases on time payment
  • (u) Other start-up costs-Expenses incurred prior to first month projection and paid for after start-up
  • (v) Reserve and/or escrow (specify)-- Example: insurance, tax or equipment escrow to reduce impact of large periodic payments
  • (w) Owner's withdrawals-Should include payment for such things as owner's income tax, social security, health insurance, executive life insurance premiums, etc.

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  • 6. Total cash paid out (5a through 5w)
  • 7. Cash position (end on month) (4 minus 6)-- Enter this amount in (1) Cash on hand following month-

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    Essential operating data (non-cash flow information)--This is basic information necessary for proper planning and for proper cash flow projection. Also with this data, the cash flow can be evolved and shown in the above form.

  • A. Sales volume (dollars)--This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic anticipated sales (actual sales, not orders received).
  • B. Accounts receivable (end of month)-- Previous unpaid credit sales plus current month's credit sales, less amounts received current month (deduct "C" below)
  • C. Bad debt (end on month)-- Bad debts should be subtracted from (B) in the month anticipated
  • D. Inventory on hand (end on month)-- Last month's inventory plus merchandise received and/or manufactured current month minus amount sold current month
  • E. Accounts payable (end of month) Previous month's payable plus current month's payable minus amount paid during month.
  • F. Depreciation-Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service

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