60% of eligible receivables can be used for the revolving line of credit.Īs the months pass and you compare your monthly cash flow statements to your projections for each month, the numbers should match up.25% of sales will be collected the 2nd month after the sale.75% of sales will be collected the month after the sale.What can you do today to prevent the negative cash flow?* *The company is projecting negative cash in November. Here is an example of a cash flow projection that has been abbreviated to 4 months for the sake of simplicity: If you see a negative number for one of the months, don't panic: You have time and options to prepare your business. If you see positive numbers across the board, congratulations! You may have some extra dollars to invest back into your business. Excess (deficit) of cash: This is the number that counts.Total uses of cash: Tally all your expenses so you can see exactly what will be going out the door each month.Uses of cash: List every likely expense your business may incur, such as payroll, accounts payable to vendors, rent and loan payments, etc.Total sources of cash: Add the amounts in the 'Operating cash, beginning' row to the amount in the 'Sources of cash' for each month.Sources of cash: All money coming in each month (receivable collections or direct sales, loans, etc.).Operating cash, beginning: The amount of money you'll have at the beginning of each month.Then, in another column on the left-hand side, list the following cash flow categories and enter the appropriate amount in each column for each month (see descriptions below).: To get started, create 12 columns across the top of a spreadsheet, representing the next 12 months. With these realistic assumptions in hand, you can begin drafting your cash flow projection. Only the most likely numbers should appear on your spreadsheet. Don't let optimism factor into your key assumptions.

Cashflows meaning