We’ve written a review on a sample of the templates out there in an attempt to simplify the choices for you.
By Diane Pilling · 24 Oct 2012
As mentioned in earlier blogs, planning is key. Cash flow forecasts is a way of making sure you don’t overspend and end up insolvent. Controlling money in business is harder and more erratic than controlling ones own personal finances. For example, VAT on products sold or services rendered is paid in one lump sum after the year end, comparing that with ones personal finances, tax is paid before you receive your pay check and is incorporated into what you are buying before you even get to the till. Clearly the government believes that businesses have more fiscal responsibility and this must be shown to be the case. However Cash flow forecasts can be like looking into a crystal ball when done wrong. Luckily there are some templates out there that are designed to help you, and we at Affordable Accounts Group are going to run through a few to help you get a better understanding of what to look for. We have put our top 3 below, number 1 and 2 are links that will directly download the template in XLS format.
3. Heron Accounting services’ Template
Our first example is the only one which exists entirely on the internet. A good beginning to this article, it shows exactly what should be considered in cash flow forecasts. Income is first including sales, loans and investments. This is broken down by month and is totaled at the bottom. Underneath the income is the ever-present outgoings examples include, Employee wages, Rent, Utilities, Insurance, Advertising, Bank charges, and Dividends. By no means a complete list, it is a good majority of universal outgoings however more specialist ones may exist for you. Finally comes the surplus/deficit for each month, the opening cash balance and the closing cash balance. Unfortunately, as this one can not be downloaded it makes editing very difficult and one may find that copying this out may be time consuming and ultimately fruitless. The ones below could be a better option.
2. Higher education academy’s template
Another brilliant example of what should be recorded in accounting. Written by the Higher Education Academy , an independent organisation that supports higher education institutions and is funded by the Government, this template is intuitive and accessible. The template features a wide range of example payments that could be made by the company, although some are lacking in detail or could be seen as slightly ambiguous. However the interactivity more than makes up for this. Totals will be calculated automatically and added to the balance at the bottom, saving time having to factor in equations yourself. Although this programming can be done with little work, it is a god-send to those of us who are slightly less computer literate than others!
1. Businesslink’s template
By far the favourite of the three is this one by Businesslink. A government initiative to help fledgling businesses with the finer details of commerce for free. Firstly it feels a lot more accessible as a document and is set out attractively. Example companies and outgoings are already written in in an attempt to alleviate the over facing nature of cash flow forecasts and we believe that helps tremendously also combining the cash flow forecast with the sales forecast provides a much more complete overview of the business than a cash flow alone. By plotting the income and outgoings of a company for the past months it will help a company see what could be round the corner in the months or years to come. For instance, a massive sales hike could occur around Christmas time, year on year and the knowledge of this could save untold sleepless nights when cash is tight in the latter months of the year.
All in all, taking up any cash flow template should help tremendously and may act as an unseen angel helping you avoid the problems that could occur if money gets tight and suppliers, or worse employees, don’t get paid. As ever, if you have, any questions at all please ring us on 01942 356681 for a chat or to arrange a meeting either in our office or anywhere.