hey it's patti scharf CPA and co-founder
of catching clouds the leader in
e-commerce accounting today I want to
give you an example about how to project
out your cash flow on Saturday I gave
you a video and talked about why it's
important to be tracking your cash flow
and keeping an eye on that going forward
if you miss that video you can see it
right here but let's just jump in and
get started all right so you can do this
in Excel you can do it in Google sheets
and it's really really simple
all you do is you have your any day that
you've got a bank that is open you're
going to have a change in bank balance
because you're going to be having money
coming in you're gonna have money going
out and that's all we're looking at
today is September 3rd and we're gonna
look out ahead for four weeks you can do
this for 30 days you can do it for 4
weeks you can do it for 2 weeks you're
gonna do it for 60 days whatever works
for you ok and what you're going to do
is you're going to have one section for
cash coming in so those are going to be
deposits into your bank account and
you're gonna have a section for cash
going out so that's going to be stuff
that's going out and then at the end of
the day you'll have your ending bank
balance you'll see that becomes your new
balance for the next day and so on and
so forth and you just kind of keep going
forward so I like to have a little bit
more detail in here so for your cash
coming in you'll keep track of things
like Amazon deposits so let's say that
you've got an Amazon you're selling on
Amazon you're getting your Amazon seller
deposit once every two weeks you would
just find out when you're expecting that
deposit and every couple of weeks you
throw it in there ok a our collections
this is going to be you you invoiced
somebody they're paying you on terms and
you're kind of estimating when you're
going to get the check you call up your
customer and say hey when are you gonna
pay me and they say hey you'll have a
check by Friday then you can throw that
number into your cash flow projection ok
PayPal transfers stripe anything else
that's coming in you can just include on
there to show your cash coming into your
account
okay then you have another section for
cash out this is going to include things
like money that you're taking out
personally an owner distribution or it's
going to include payroll or your sales
tax payments your payroll tax payments
any auto-draft payments that are going
to come out of your account
automatically through ACH any of your
monthly bills when you're paying a lump
of bills every few weeks or something
like that and then any credit card
payments basically anything that's that
you're planning on using the money
that's in your checking account for okay
and then you can just go through and
fill all this out in my example I want
everything to be entered as a positive
so that I don't accidentally forget
here's a negative and then I have like
if I had negative $250 and I put it in
as a positive number it would like
actually add it in there and it would
throw everything off so I like to put
these in as positive numbers so that
these numbers down here are all
formulaic
and you don't screw stuff up okay so
let's say you've got $30,000 in your
bank account and you say hey I don't
need $30,000 in my bank account I'm
going to take 20,000 out and stick it in
my savings account you can see that when
you do that
oops remember what I just said you can
see when you do that that you're gonna
run out of money in just a week and a
half so no maybe we shouldn't do that
okay yeah one thousand I can save you
know so so all you're trying to do is
just make sure that when you've got
payments coming up say you're going to
purchase some new inventory or something
like that you just want to make sure
that you have the cash flow sufficient
because one of the biggest reasons that
businesses go out of business is due to
cash flow not due to lack of
profitability all right so so this is
how you do it on a day-by-day basis
I would recommend if you are right if
you're just running the ragged edge that
you do this and just make sure that
you're staying on top of things I would
also say you may want to make sure that
you're pulling out money for savings as
much as possible if you haven't seen my
video on profit first maybe check that
out that might help you as well okay so
that is the daily cash flow you'll also
want to do something like a three-month
cash flow so you'll see how this has
lots of details on it I probably
wouldn't do that for a multiple month
cash flow because you just aren't
entirely sure what's going to come out
and when but you can get estimates so
let's say you've got some accounts
receivable so you've sent out invoices
to people let's say you have $50,000
worth of invoices and usually
historically speaking you collect 80%
within 30 days then you'll know roughly
how much money is going to come in based
based on just that knowledge of your
business okay and it's really
straightforward you just start with your
starting balance estimate how much
you're going to collect estimate how
much you're going to need for money
going out based on how much you spend
each month on payroll how much you spend
for rent so on and so forth to come up
with your ending bank balance and you
just want to make sure you've got enough
money to cover the bills that's that's
basically how it goes so it doesn't need
to be complicated this should be really
straightforward if you have any other
questions or comments or tricks that
have helped you make sure you include
them in the comments down below I hope
this video helped you if you did please
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you later