What is in this book - EZ CASHFLOW(tm) provides you with the templates that are used within Microsoft Excel(c), and allow you to create cash flow projections for your business.

The disk contains two files: "cash flow cash" and "cash flow accrual". The booklet contains a complete print out of each file, a row by row and a column by column explanation of each of the forms, and this general set of instructions.

Why two files? - There are two formats of accounting that are generally used today. Cash basis is used to report all expenses and all incomes during the month in which they actually are spent or received. This format is considerably the simpler of the two, but the individual months of the year have a tendency to demonstrate large fluctuations in net income. Cash basis will assume that the inventory you purchase will be paid for in the following month, and the sales tax collected will be paid in the same month it was collected.

Accrual accounting allows a business to charge the various incomes and expenses evenly throughout the year. An example of this format would be the charging of 1/12th of the property tax to each of the months as compared to charging all of the property tax bill to the month in which it is paid. With the accrual accounting example we have accrued wages, rent overage payments, payroll, depreciation, income tax, as well as allowed for the inventory to be ordered with dating terms.

Please note, that while there is similarity in the figures used in the two examples, they are not the same business. You should not look at one, see that it has more cash, and decide that is the method you want to use. You should decide which template you will use, based upon the accounting method you are using in your business, and with the advice of your accountant.

How do I use EZ CASHFLOW(tm)? - Begin by making a duplicate of the disk, and saving the original with this booklet. As you access either of the templates with the Microsoft Excel(c) software, you will want to save the file several times using different names for each file. This is done so that in the event you destroy one of the templates and the formulas, you can delete that file and start with a fresh template.
Whether you choose the accrual or cash basis, each format provides you with the 12 months of a calendar year, annual totals, a space for budget comparison, and the first month of the following year.

Take your financial sheets and compare the layout of your financial sheet to the appropriate template. The guide sheet that accompanies each of the examples will tell you what row the information appears on, a brief description, and the notation of whether that row is one that you will need to input to, or whether it is a row that the template will calculate for you.

As you complete the data in each of the columns, you will see the amount of cash on hand at the end of each of the months of the past year. Having completed this 12 month history, you can begin to create a 12 month projection by anticipating your sales and expenses. By reviewing these figures as well as your gross margin percentage, you will see how your cash balance will look for the next 12 months. If you have created a budget for your business, you will want to enter that data in the appropriate squares in column Q.

As you watch the cash balance at the end of each month, you can begin to calculate your inventory purchases, dating (if you are using the accrual method), and the level of which you can allow your accounts receivable to grow to. If there is a cash shortage, you can also input information about loans that may be needed to cover your cash flow needs for these months.

As each of the months shown in your cash flow chart become history, you will want to update the cash flow projections by entering the actual numbers for the month just completed.
If your figures are not correct at the end of the month, you may want to study the chart to see where your financial sheet and cash flow chart differ. If you would rather have the information necessary for the future months to be correct, and not correct the just completed month on a row by row basis, you will simply need to enter the correct ending inventory, ending accounts receivable, cash balance end of month, and the appropriate future inventory dating.

What can I expect to gain from this booklet? - This booklet, and templates are designed to help you forecast the future of the business. You will be able to anticipate the following information:
 Cash balance of each of the next 12 months
 Any cash shortage, including when it will occur, for how long, and when you can pay it back
 Inventory levels - including future open to buys
 Accounts receivable
You can also create a "what if" scenario, by anticipating fluctuations in your:
 Sales
 Gross Margin
 Expenditures

You will find that this will be one of the most profitable tools available to you as a business owner. By having this information you can then plot a future growth chart for your business. Click on CHART to see an example (non working) of the EZ Cashflow Cash Basis Accounting Chart.