cash flow help please

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi I recently passed technician and have been doing books and payroll for new Ltd company, he has now asked me to prepare a cash flow projection any advice would be welcome on best way to set this up and maintain.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash flow help please

    we have a bespoke software programme that does our cash flow projections because they can get particularly complex. The same thing can be maintained on an excel spreadsheet, though depending on the size of your client it may be quite time-consuming to set up.

    I would suggest you looking at the Cash Management and Credit Control option at AAT Technician and then adopt the cash flow projections to your company..

    Kind regards
    Steve
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash flow help please

    Hi there

    Ive been doing the same exercise quite recentley and I started off by looking at the present cash at bank figure and using that as a starting point, then go through the sales ledger and work out approximately how much each month you expect in (depending on your invoicing structre!This will give you a guide for your cash in, we invoice 6 months before the service so its easy to work out for me!) then go through what your expecting to pay out - Direct debits, salaries, utilities, rent etc which often remain constant, then look at your production or operating costs - (depending on your companies activities)and calculate what u are likely to be invoiced and the payment terms (30, 60 days??) you will then have a rough idea how much your cheque runs or payment runs will be.
    Then its just a case of plotting all the info into a s/sheet. i always tend to deduct around 15% from my expected income and increase expenditure by 15% just to cover any contingencies!

    I find the easiest way to layout the spread sheet is -

    Each month across the top in colums
    then underneath that -
    income seperated by each income stream (totaled up)

    then expendituire, wasges, rent , running costs etc
    Then purchases (by project, dept or activity or whatever)
    each expenditure listed out and totalled up at the bottom.

    the at the very bottom;

    the opening balance for the month
    plus the expected income minus the exp expenditure gives you the closing balance for the month and the opening balance for next month.


    Basically play around a little its only a projection so it dosent have to be spot on!

    Hope this is useful to you!

    Thanks

Categories

Privacy Policy