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We make a cash flow forecast

A reliable budget will allow you to understand how to control your expenses: the organization will spend only when you are clearly aware that these expenses can be allowed. The budget will also allow you to see information about savings to create cash reserves for the company.

One of the best ways to manage a firm’s budget is to create a cash forecast. Such forecasts will be needed to plan financing and allocation of resources between different lines of business. We’ll introduce you to the basic steps that you need to take in order to use the forecasting capabilities to the maximum.

Step one. We start from the starting position. This section will help determine the type and amount of debt and equity financing required by the business, as well as which financing will work best for the company. This section will allow you to set the size of the initial investments required for organizational measures for starting a business, as well as how much money can be spent on launching the main business processes (raw materials — production — sales). To determine the total cost of starting, you need to add the cost of equipment, inventory, land, buildings, loan payments, as well as initial costs, such as insurance or rent. Having received the total amount, you need to subtract this amount from the available funds in order to find out how much money is left.

Step Two We determine the sales forecast, which will show whether the organization’s cash flow will support the business at the required level. You need to start by figuring out what the monthly, annual sales will be, and the role of each factor in them. At this stage, you need to try to determine if there is a positive outlook for your industry. If there is a positive outlook, you will need to make a forecast how many customers will purchase your product and what exactly each group of customers will buy from you. Next, you will need to provide a sales forecast for each product or service.

Step Three It is necessary to determine the total cost of goods sold and the amount of costs. To find out the percentage of profit, correlate the amount of expenses to the amount of income. Make sure that your estimated percentage falls within the industry average and that your business’s profitability is comparable to other businesses in your industry. That is, it is necessary to analyze the market.
Step Four Understand in detail the structure of your expenses. It is necessary to include any payments in this section and identify the main items of expenditure and what exactly they consist of. This step will be needed to determine where and how to save, that is, reduce costs. When determining costs, you will need documentary financial statements. Pay particular attention to the analysis of credit payments, obligations to suppliers of goods and utilities, as well as their timely payment.

Step Five Taxes required. It is here that enterprises suffer the greatest losses from fines and penalties. The main rule: when considering profitability, do not forget to include all tax deductions in the price of the goods and make sure that the accounting in your organization is correct. This will help the program “1C”.

Step Six After everything is calculated, you will receive the amount of money that the business brought as a result of work for the year or quarter. This amount should be positive so that the business can further develop and repeat with increasing cash flow cycle.

Here are some recommended tools that you can apply not only in business, but also in planning your personal budget.

Tip number 1. Evaluate income below expectations.

Always rate your earnings lower than you expect. This is the best way to prevent unfounded predictions because you are not setting too high forecasts. It is also important that you have a schedule for the arrival of money so that you can plan your expenses.

Tip number 2. Small budgets.

There are several small budgets that you will need to create with your larger one. This helps to get daily budgets as well as weekly budgets. All this will help to focus on cash flow (cash flow) and not spend too much.

Reflection of DDS in “1C: Accounting 8”
Consider the mechanisms of working with cash flows implemented in 1C using the configuration example 1C: Accounting 8, as amended. 3.0

First, let’s configure the program: select the “Administration” menu item, in the window that appears, click on the “Accounting Settings” link. We are looking for the item “Setting up a chart of accounts”, follow the link and click on the inscription “According to settlement accounts and cash flow items”. In the menu that opens, we see the item “By cash flow items”, if the check mark is checked, then we proceed to filling out the directory. If the settings are off, click “Enable.” The menu item “Functionality of the program” will open, here you should enable the option “Cash flow items”, after which the possibility of using this tool.

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