Business Loans of Utah (BLU)
Preparing the Cash Flow Forecast
A. What is a cash flow forecast?
The cash flow forecast shows on a monthly basis how much money you will actually collect and in that same month what bills you pay. Money is only considered revenue for the month in which it is received. For example, if you make a sale in June worth $100 with a 30-day term and the customer pays you in July, the $100 will be recorded as revenue for July (i.e., the month the money was received, not the month the sale was made).
Likewise, for bills, insert the amount in the month you expect to pay the bill, not the month the bill was received.
The ending Cash Position tells you the amount of money you expect to have left at the end of the month. This amount will show as Cash On Hand at the beginning of the next month.
B. Filling out the Cash Flow Forecast
Applicants must compile sales (“Cash In”) and expenses (“Cash Paid Out”) on the cash flow forecast. The cash flow forecast is an Excel spreadsheet with all the necessary formulas built in so you only need to input your numbers. DO NOT CHANGE ANY FORMULAS.
The spreadsheet lists the most common sources of sales under “Cash In” and the most common expenses under “Cash Paid Out”. You are free to change the line titles to match your business needs. Leave any item that does not apply blank.
C. Other Line Item Explanations
Loan Proceeds: If requesting a drawdown line of credit put the appropriate amount in each month you expect to draw funds.
Cash Injection: If you anticipate an owner or an investor will put cash into the business, show the expected amount in the month it will be received.
Gross Wages: Refers to wages paid to non-owner employees.
Owner Wages: Any payment (draw or wage) made to an owner.
Payroll Liabilities: These are the taxes and benefits paid by the employer for Social Security, Medicare, Workers Compensation and Unemployment.
Purchases: This refers to purchases of items for resale.
Outside Services: Money paid for services performed by other companies or individuals such as window or floor cleaning, lawn services, parking lot cleaning, etc.
Supplies: Can include office supplies, operating supplies and items purchased but not for resale.
Major Purchases: Furniture, equipment, computers or any other asset purchase paid for by either loan proceeds or with company revenue.
Preparing the Cash Flow Forecast – BLU Application Package / 1