Friday, April 28, 2017

Going Pro: Two Cash Flow Tools to Rule Them All

I’ve managed to track my finances with just two simple budget planning forms: a Budget Sheet, and a Cash Flow sheet.  Both can be easily done in Excel.

The Budget Sheet is designed to show income, both real and potential.

Date is obvious.
Paid is money that has actually come in, now in the bank.
Promised is money that I have a contract for, so it’s real.  They’ve put 30% down.
Expenses is a summary of my monthly expenses. I transfer lump sums twice a month as if it was a paycheck.
Actual is what my bank account should show.
#Mos is how many months of working capital is in the bank
Notes is to explain the change. I also use “Comments” in each field as necessary
Possibilities are project under discussion but without a contract.  

The Cashflow is a more detailed, expressive way to track the #Mos column above.   

The first column has the starting balance for each month, HI (Hurricane Images) Confirmed Income, Potential Income, Expenses Payroll, Expenses Business, Total Expenses.  Your expenses should be the same each month, letting you predict the future.
The trick here is to update the chart monthly to show exactly how much would be in the bank if no new funds came in.  This makes it easier to predict when you’ll be in financial trouble, and when to breathe easy.  As you can see, this snapshot in time tells me I'll be broke in January if no new funds/projects are completed.

No comments:

Post a Comment