Issue link: https://docs.hic.us/i/403552
A A T T T T A A C C H H M M E E N N T T I I M M O O N N T T H H L L Y Y C C A A S S H H F F L L O O W W P P R R O O J J E E C C T T I I O O N N S S Cash Flow Projection can be described as a method of comparing the amount of Cash In versus Cash Out. Making a profit is one thing, but having a source of available cash to pay bills, wages, etc. is another. Many business owners can show a nice profit on paper, but have no money in the bank. This is due to negative cash flow, which means the cash is going out faster than its coming in. Negative cash flow has doomed many businesses! Taking firm control of your company's cash flow is a major part of managing a successful business. A key point to remember is that Cash Flow only deals with real-time sales and expenditures. A sale that is made in December but paid for in January, is attributed to January's Cash Position not December's. The same goes for expenditures. If you incur an expense in December, but pay for it in January, then it goes against January's expenditures, or cash out. There will be many situations where you must spread out expenditures over several months to insure positive cash flow. As a Financial Manager, you must have the vision to look ahead at expenditures in the coming months and plan accordingly. Cash On Hand (beginning of month) Cash On Hand is the same as the Cash Position from the previous month. Cash Receipts These categories are listed for reference purposes. You may add or delete categories as needed to better reflect your operation. Cash Sales - All cash sales. Omit credit sales unless cash is actually received. A sale is never credited as a sale until payment has been received. Collections From Credit Accounts – These are Credit Sales that have been collected, and not attributed to Cash Sales. This includes payment from credit card companies for purchases charged to credit cards. This would also include payment from customers who have in- house credit terms. NOTE: The amount received from a credit card company or factoring company, will be the total sale minus the transaction percentage that the credit card www.hsi.us care@hsi.us 103