Understanding your companies cash flow is critical to running your business. It will let you know if you can invest in hiring more people, in growth through sales and marketing, or if you need to cut costs or raise more money to make your next payroll. I created a video for a 13 week cash flow forecast a few years ago that is really useful when cash is super tight, but have found the monthly forecast a little easier to create and manage, so I wanted to create a video for the monthly cash flow as an easier alternative.
I created 2 videos as I ran out of time creating the first one. The first video shows how to create a monthly cash flow using your Profit and Loss (PL) and Balance Sheet (BS) statements as an input. We create a high level revenue / seasonality forecast and make forecasts that drive the future cash flow.
We create a 1 page financial summary of Profit and Loss, Balance Sheet and Cash Flow statements so we can see the annual trends and check that our forecasts are making sense. This is part 2 of the how to create a cash flow video but is a great video to see on its own.