Using the Calendar to Solve Your Cash Flow Dilemmas

Posted by on November 7, 2012 in Business Financing [ 4 Comments ]

cash flow business financeThere is not a small business owner out there who doesn’t believe that cash flow is important; cash is what keeps your business afloat. Being able to identify how much cash you have coming into your business helps you properly allocate how much you will send out.

Cash flow evaluations are difficult, no matter the type or size of your business, but learning to identify them in-sync with the calendar will help you devise the simplest equation for cash flow supervision. Everyone has a different style, but follow one of these guides to take charge of your cash flow management.

1. Daily

With each day your business changes, therefore, for some business models it makes sense to monitor your businesses’ daily transactions. But, where do you start? For that day, figure you cash inflows. Cash inflows are just as they sound, money literally coming into your business, whether it be by sales made that day or for accounts receivable.

Tip: When you’re operating on a daily cash-flow calendar, you are aiming to get an idea of what happens per 24 hours in regards to earnings. Therefore, if you had a particularly unusual revenue source that day (say, the sale of capital), it’d be best to put it to the side, as this would inflate your average.

After calculating your cash inflows, look into what money you spent for that day. Expenses for a day include (but are not limited to):

Simply put: how much does it cost to run your business for one day? Subtract this figure from the amount you calculated coming in. There you have you have your cash flow on a per day basis.

If you want to monitor your books by the day, calculate this for every business day of the week. Once you have your closing balance, you can get a good idea of which days are better for you operations and in the future, you can generate a more concise weekly cash flow projection.

2. Weekly

Weekly cash flow projections are best for those small businesses that just find daily calculations too meticulous but still do a lot of daily transactions. However, the steps you take to evaluate are almost exactly the same, just differing on the time you take to calculate each.

Look at balancing out your cash inflows with your cash outflows. In other words, look again at what your business is bringing in through sales and accounts receivable, and then subtract how much cash is leaving your business, whether it is through day rates, operational expenses, or other numbers used during daily projections. Staying on top of these numbers will help you always have a grasp of where your business stands financially. It doesn’t leave room for surprise.

3. Monthly

When you choose to look at your financial figures on a daily or weekly basis, you are getting a good feel for your business’ success. However, for more long-term planning, monthly projections are something you must be doing, as well. Where do you begin?

  • Beginning cash balance: Include cash made available by any loans, in addition with sales, accounts receivable and any other source of income you intend to go towards working capital(such as the sale of capital).
  • Cash outflows (where you’re spending your money): These are a bit different than when you were doing them with short-term projections. How so? Larger purchases you made were not factored in those daily and weekly balances. You need to add in any sort of investment made for the month (inventory, for example).
  • Usual suspects: This includes salaries, rent, taxes, operating expenses, etc. Did you have to pay out for any loans or other financing? Add these in. Subtract your cash outflows from your cash inflows to reach your cash flow balance for the month.

Monthly cash flow calendars are smart because they give you a better chance of creating cash flow projections for a year. The more familiar you are with the behavior of your company, the better you will be able to predict it. Whether by day, weeks or months, keeping a close eye on your cash flow is the key to solving any of your working capital dilemmas.

Photo credit: livemint.com

Meredith Wood is the Community Manager at Funding Gates, the world’s first CRM platform for receivables management. Funding Gates provides analytics, real-time recommendations and tools to get small businesses paid faster and more effectively. Looking to discuss small business finance? Connect with Meredith on Twitter @FundingGates.


4 thoughts on “Using the Calendar to Solve Your Cash Flow Dilemmas


  1. avatarsuiji

    Calendar really helps in organizing your company’s cash flow. It allows you to record every money that comes in and goes out of your funds.


  2. avatarNikki R

    EXCELLENT article! This makes cash flow management a simple process that pretty much only requires action. On behalf of countless business owners, thank you :)

    I’d like to contribute to this post, an article – from the Easy Numbers blog by Billy’s Billing – about gaining control over the cash flow of a small business/startup. It shows companies how to do it in seven easy steps. Check it out at http://ow.ly/f8ARt/


  3. avatarKirsten Clark

    I agree, by preparing a cash flow projection in excel you have information to help make decisions in advance of being faced with a possible financial crisis. The economy has been tough these past few years and it’s important for all business owners to track and understand their cash flow.



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