The Key to Your Business Success! As a business owner, staying on top of your cash flow is crucial. Ensure the stability of your operation with a clear understanding of your incoming and outgoing cash. Don't let poor cash management hinder your success - start your 8-week cash flow forecast today with proforma.cash.
Forecast the money coming in and out of your business for the next 8 weeks. Tackle cash flow challenges before they happen. Get started today!
proforma.cash connects to QuickBooks Online and is a comprehensive solution that allows you to manage your cash with ease and efficiency, leaving you free to focus on growing your business.
The word “pro forma” basically means a projected outcome of financial results. The perfect pro forma cash flow is a projection of inflows and outflows of cash that a business is anticipating. The goal is to make sure the incoming money from marketing and sales activities is enough to pay for expenses as they become due while leaving extra cash in the bank.
Seems simple right?
It’s not and can be very frustrating for the following reasons:
There are many different benefits of having a pro forma cash flow that can change how you manage your business forever.
Knowing where your cash is and how it is moving through your business is the most important benefit of having a pro forma cash flow.
The perfect pro forma cash flow will account for everything that impacts the inflow and outflow of money every week, including:
A perfect pro forma cash flow tailored to your business will change how you look at your business and manage it.
Your bookkeeper, accountant, controller, or anyone else on your finance team can assemble the information needed to create a practical pro forma cash flow. Most of the information you will need is available through the reports found in your accounting system. Some of the information you will need to create will be based on bank and loan statements.
Microsoft Excel and Google Sheets are the two most popular applications for creating a perfect pro forma cash flow. Individual tabs or sheets get made for each segment of information you have which gets aggregated on a summary tab or sheet.
The best way to compile and present the information is to line up everything with a week number. For example, if you are in week 20 for the year, what financial transactions will occur on week 20? What are the cash inflows and outflows for week 20? Seeing your information every week with a projection for the following weeks is the simplest and easiest way to get a handle on the cash in your business.
It is common practice to update your pro forma cash flow weekly. Many businesses will update a monthly or quarterly cash flow statement; however, this is mainly for reporting purposes, not operational purposes. A company should prepare a pro forma cash flow at the beginning of each working week to provide a projection that should guide the management activities of a business owner. A pro forma cash flow is an active and live resource for business owners to help them get ahead of any anticipated problems while planning for the future.
Having a template that you can update each week should take less than 15 minutes to complete. Make sure you create the template to include the correct calculations and functions. In that case, you should be able to export the information you need from your accounting system and then copy and paste it into your spreadsheet. All of the calculations and functions will automatically update, and you’ll be ready to start the week.
Accounting software is designed to solve common problems and challenges faced by the majority of businesses. Accounting software is not capable and is not designed to be customized to the unique needs of your business. A proper and helpful pro forma cash flow should take into account many different pieces of information from many different sources. Accounting software is meant to record transactions and provide minimal reporting. This is by design because every business is unique. As an entrepreneur or business owner you will want to customize how you view the cash your business has and how it moves around. Accounting software is very limited but can be used to find the information you need to build a pro forma cash flow.