1. Cash flow statement
Sometimes called cash flow projection, this is one of the most important steps in completing your financial plan. It details your incoming and outgoing cash and helps make sure you have enough money to keep your business running. You can use the Business cash flow view to see a monthly summary of your incoming and outgoing cash flow in the CommBank app.
Try this simple cash flow formula:
- Determine the period you want to focus on (e.g. the next 3 or 6 months)
- Start with your opening cash balance
- Estimate your incoming cash and expenses for the period
- Subtract the estimated expenses from your income and add it to the opening balance
You can look at your cash flow statement from previous years to determine if you’ll have enough to cover your costs, like wages and rent, over the specified period. It’s important to allow for glitches like late payments when projecting your cash flow.