Ako vytvoriť plán cash flow

Running out of cash if the top reason why small businesses fail. A regular supply of cash is vital to any organisation, so that it can pay salaries and bills, as well as invest in growth. Even companies that manage to make a lot of sales can become insolvent if cash flow is disrupted, for example in case of unpaid invoices.

This is why tracking your cash flow each month is essential. By analysing what happened the previous month and creating a cash flow forecast of the months to come, you’ll be able to spot trends, anticipate when your business might need more cash and prevent cash flow problems. Another advantage of a cash flow forecast can also be to help you define the best moment to invest, such as buying a new expensive software or piece of machinery.

Calculating cash flow is simply a matter of comparing cash coming in with cash going out over a time period (for example, the past three months). The net cash flow formula is: Cash Received – Cash Spent = Net Cash Flow.

Cash received corresponds to your revenue from settled invoices, while cash spent corresponds to your business’ liabilities (costs such as accounts payable, interest payable, incomes taxes payable, notes payable or wages/salaries payable).

So long as the first number is bigger than the latter, you have positive cash flow, meaning you have cash in the bank. If your cash flow is negative, it means you finish the period with less cash than the beginning.

For a deeper understanding of how much cash is available for you to spend, you can us the following free cash flow formula:

Net income + Depreciation/Amortization – Change in working capital – Capital expenditures = Free Cash Flow

To help you use this formula, here are some common cash flow management definitions:

• ‘Net income’ is obtained by taking the revenue from sales and subtracting to this number the cost of goods sold, selling, general, administrative and operating expenses, interest, taxes and other expenses.
• ‘Depreciation/Amortization’ are like scheduled expenses used to reduce the carrying or market value of some assets.
• ‘Change in working capital’ stands for the difference between current assets (such as cash, customers’ unpaid bills, inventories of raw materials or finished goods) and current liabilities (such as accounts payable).
• ‘Capital expenditures’ are the funds you used to acquire, upgrade and maintain physical assets such as property, buildings, technology or equipment.

Once you comprehend how to calculate cash flow, it’s easier to understand how to forecast future cash flows.

A cash flow projection uses estimated figures to give you an idea of what’s in store over the coming weeks and months.

There are several methods to forecast cash flow. Here is one method, which is very simple:

1. Pick a timescale – for example six months in the future – and estimate the value of your transactions over that period.
2. List the cash you would receive:
   • Start with a sales forecast (especially recurring invoices, which you can predict with some certainty)
   • Add other inflows such as investments, grants, asset sales and tax rebates
3. Separately, list the cash you would spend: future overheads, including salaries, rent, hardware, software and tax.
4. Use the Net Cash Flow formula see above to work out if you will have a positive or negative cash flow over the selected period: Cash Received – Cash Spent = Net Cash Flow

‘Sales paid’ is the amount of cash received in a given month for goods/services supplied during that month. The “75%” note indicates that only three-quarters of the cash due for sales made in any month will be received during that month.

‘Collections of credit sales’ refers to the amount of cash received during a given month for goods/services that were supplied in previous months.

Thanks to your cash flow forecast, you can see whether you will have positive or negative cash flow over the coming months. In case of negative cash flow, you can take appropriate measures to prevent cash flow problems.

Despite your predictions and your cash flow forecast, unforeseen circumstances can still occur. You should never wait to be in trouble to protect your business. The good news is that there are various options to consider from improving your cash flow management processes, to keeping a buffer for rainy days or turning to trade credit insurance. To go further, you can also have a look at our cash flow management guide.