LEARN TO MAKE A CASH FLOW PLAN. Managing a business is not an easy task, you must know how to anticipate and plan your future actions, this will allow you to have a balance and always keep control over the business.

A cash flow forecast is an essential tool for the prosperity of a company.

What is a cash flow plan?

The cash flow plan is a forecast document drawn up during the first year of activity of a company, it includes all the foreseeable receipts and disbursements of the latter. It is in the form of a table that highlights the financial flow of management and investment of the company, the latter must be broken down month by month.

Like the initial financing plan, the income statement, and the provisional financing plan over 3 years, the cash flow plan is one of the main tables of the company’s financial business plan. He must be able to assess whether the company is not exceeding its deadlines and honoring its commitments. It must also make it possible to manage delay offsets.

How to make a cash flow plan?

Each company must be able to present a cash plan at the end of its first year of creation because the balance accumulated each month by the company will make it possible to know the situation of the company and will help to anticipate and to find solutions in the event of imminent problems.

What you must therefore do first to establish your cash flow plan is to create a table that will consist of two parts, one for receipts and one for disbursements, as well as a column for each month of the year. ‘year.

After establishing your table, here are the steps to follow:

List receipts and disbursements

Setting up the list of receipts (inputs) and disbursements (outputs) of the company is the first step to do.

Cash receipts represent the company’s projected revenue, among the cash inflows you will have:

  • The forecast turnover includes tax, which includes customer billings, sales of goods or services;
  • capital contributions made by the partners of the company include their current accounts, as well as capital increases;
  • VAT credit refunds;
  • bank loans.
  • Purchases including tax, whether raw material or other;
  • the remuneration of employees, temporary workers, trainees, or compensation for the manager;
  • external charges for rent, electricity, water, internet subscriptions, or software;
  • marketing expenses, all advertising, social networks, creation and printing of flyers or business cards;
  • expenses in connection with the insurance of vehicles, premises, telephones, and others;
  • repayment of loans and financing costs;
  • taxes and VAT.

Calculate the balance and make the charges

After establishing the expenses and income of the business in a table, it is enough to differentiate between the two. For new businesses, it is essential to know the payment terms in the same sector of activity, and then calculate the balance by making the difference between the outflows and inflows of the month.

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