Tag Archives | tools

How to Develop Daily Cash Report

See Also:

Cash Flow Statement
Track Money In and Out of a Company
Cash Flow Projections
Cash is in Your Business
Thirteen Week Cash Flow Report

The Daily Cash Report

The Daily Cash Report is used to report on the daily cash balance and to help manage cash on a weekly basis. When entering a situation where active cash management is required for your daily cash flow, this tool is especially helpful. Use the daily cash report template as a tactical, active cash management tool. Knowing your daily cash position as well as your weekly cash commitments will give you added impetus to collect money and/or to generate revenues. You can then take the information generated in the daily cash report and incorporate the information into another useful tool, the Flash Report!

Why use a daily cash report? Often CFO/Controllers when facing a cash crunch manage cash by reviewing the online bank balance. Though easy to do this number is not accurate. It does not take into consideration outstanding checks. Another symptom of a cash crunch is that accounting falls behind in processing information. By preparing this daily cash flow forecast or projection you force the accounting department to stay current with posting transactions.

Cash Flow Forecast

This tool is also helpful when used in conjunction with the Thirteen Week Cash Flow Projection. It is helpful to think of the 13-Week Cash Flow Report as giving you the strategic big picture needs. Conversely, the Daily Cash Flow Report provides a more tactical level measure of your firm’s cash position. You can tie a week’s worth of cash receipts and cash disbursements as reported in the Daily Cash Report to the 13- Week Cash Flow Report.

The Daily Cash Report is updated daily and should not take more than thirty minutes to prepare. However, there is some element of planning involved insofar as weekly cash commitments are concerned. If the company is in a severe cash crunch, you may need to negotiate with vendors about partial payments.

Prepare the Daily Cash Report in the morning of each workday. Use the information on the report to help you manage cash for the day that you prepare it.

Managing your cash flow is vital to a business’s health. If you haven’t been paying attention to your cash flow, access the free 25 Ways to Improve Cash Flow whitepaper to learn how to can stay cash flow positive in tight economies. Click here to access your free guide!

Daily Cash Position

This purpose of this section is to give you the cash position at the start of the day as per the G/L balance. The cash position for the start of today is the same as the ending cash balance from the last business day. Hence, the report you update and start off with at the beginning of today will be on the information from the last business day. (Reminder: this report is prepared the following day of the reporting period.)

After obtaining the starting balance for the last business day, we need to capture cash inflows. The third piece of financial information you need to obtain is information on cash disbursements from the last business day.

Sum up these elements together to obtain the ending cash balance for the last business day: Reconciled Balance + Total Deposits – Total Disbursements = Cash Balance.

Incoming monies from yesterday Disbursements (Insert Date from 1 business day ago)- Payroll Fees – AP Checks – Other Disbursements = Total Disbursements

ENDING CASH BALANCE AS OF : This is also the Beginning Cash Balance for TODAY. Reconciled Balance + Total Deposits – Total Disbursements.

Weekly Cash Position

The weekly cash position gives management an estimate of how much incoming cash and cash disbursements the company expects to have for the entire week. Remember, this is an estimate only. It should be updated periodically so that the company improves on the estimate. Your company may prefer to have a separate line item for certain significant cash disbursements. As long as the overall report is kept as simple as possible, this is acceptable.

Managing Payables

The CFO/controller will need to list the different vendor/suppliers that the company intends to pay for the week. During times of extreme cash shortage, it may be helpful to make a note of which vendor/suppliers are of high priority.

Daily Cash Report Monitor & Review

The Daily Cash Report should be monitored and reviewed on a daily basis in situations where cash management is big key part of company survival. A key part to focus on is the estimate of weekly cash deposits. Monitoring and reviewing the cash deposits will improve the accuracy of the estimates. For more ways to improve your cash flow, download the free 25 Ways to Improve Cash Flow whitepaper.

Daily Cash Report

Strategic CFO Lab Member Extra

Access your Cash Flow Tuneup Execution Plan in SCFO Lab. This tool enables you to quantify the cash unlocked in your company.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

 

0

The 5 C’s of Banking

“The “5 C’s of credit” or “5C’s of banking” are a common reference to the major elements of a banker’s analysis when considering a request for a loan. Namely, these are Cash Flow, Collateral, Capital, Character and Conditions. This article will provide an in-depth description of each of the 5 C’s of credit or banking to help you understand what your banker needs to understand about your business in order to approve your loan. By the end of this article, you will have insight as to where your banker is coming from, and therefore better prepare you to handle their questions and concerns.

 

Cash Flow Importance

Cash Flow is the first “C” of the 5 C’s of Credit (5 C’s of Banking). Your banker needs to be certain that your business generates enough cash flow to repay the loan that you are requesting. In order to determine this the banker will be looking at your company’s historical and projected cash flow and compare that to the company’s projected debt service requirements. There are a variety of credit analysis metrics used by bankers to evaluate this, but a commonly used methodology is the “Debt Service Coverage Ratio” generally defined as follows…”

More at WikiCFO.com

1

Creating a Flash Report

The finance function of an organization can contribute significantly to a company’s operating success. The key is how the financial leadership communicates with sales and operating staff.

A proven tool to enable this communication is the flash report, or dashboard.

The flash report details the organization’s liquidity, productivity, and profitability. It is meant to be a current summary of the company’s performance as a whole, as well as how the efforts of the company’s individual departments tie to productivity and profits.

The flash report differs significantly from the standard monthly financial statements. It’s purpose is to show a company’s leadership where they are, and where they are headed, as opposed to where they have been. It highlights strengths, weaknesses, as well as trends in each.

Does your organization use a flash report? If not, why not?

Creating a flash report has never been easier.

Now’s the time for your company to look forward. Set up a flash report today!

0

The 13 Week Cash Flow Report

13 Week Cash Flow Report: Definition

The 13-Week Cash Flow Report, defined as a method to forecast the cash flow needs of a company, is commonly used in businesses with complicated cash cycles. This tool is especially useful in a situation where active cash management is required. The 13 Week Cash Flow Model is used best as a “big picture” tool to see how much cash is required on a forward rolling basis. Having a clear sense of your working capital needs and when you need it gives added impetus to collect cash and/or to generate revenue.

This tool is also helpful when used in conjunction with the daily cash report. It is helpful to think of the 13-Week Cash Flow report as giving you the strategic big picture needs, while the Daily Cash Flow Report provides a more tactical level measure of the firm’s cash position.

13 Week Cash Flow Report: Meaning

For a 13 week cash flow report, meaning the report used to project cash flow expectations into the coming weeks, a strong understanding creates the foundation to make valuable models. There are several key areas of information that you will need to obtain: beginning cash balances, estimated cash receipts, estimated payroll and taxes, estimated operating expenses, note/lease payments, payments on LOC-ML and payments on old A/P.

The 13-Week Cash Flow Report should be used in the active cash management of the company. The tool should be updated and reviewed on a weekly basis by the CFO/Controller.

The thirteen week cash flow model should be prepared and updated by the CFO/controller. The CFO/controller should be the one to setup and prepare the template. Information to populate the template will most likely reside with the persons in Accounting and HR.

Maintenance and updating should be done on a weekly basis.

More at WikiCFO.com

0

How to Prepare a Break Even Analysis

“Break even analysis, defined as the studying the path to the point where a company is neither losing money nor making a profit, is very important to the survival of any start-up business. It can be performed for either products or the business as a whole. The break even calculation can be in reference to pro or post-forma, that is before or after the company has been formed.

Break Even Analysis Explanation

The break even analysis serves to provide the company with a very important piece of information: “How much revenue does the firm need to make in order to break even.”

This break even analysis is quite easy to do. The only critical piece of information that you will need to attain is a breakdown of the your firm’s expenses into Fixed Expenses and Variable Expenses.

Once you have a breakdown of fixed costs and variable costs, input these costs into the template. You will also be able to conduct various “What if” scenario analyses to see how the breakeven revenue will change.

Once you are able to arrive at the break even analysis you can show the Owner(s)/Management this metric and make it part of their sales planning. Another idea might be to incorporate this metric into the Flash Report review meeting. This way your staff can know on a weekly basis if they are on track to at least breaking even.”

More at WikiCFO.com

0

Are You Collecting the Data You Need to Run Your Business?

“It seems simple enough. You’re making a decent gross profit. You know who your customers are, you know how much you are charging them for your product and you know how much they are buying. So no worries, right?

Well, do you know how much it costs you to sell to each customer? What if you are generating substantial sales from one customer, yet find yourself spending a large amount servicing that customer in terms of custom orders and/or shipping costs?

Not only must you know how much you are making by product line, but you should have an idea of what your gross profit looks like for each customer, especially your key large customers. Perhaps you are missing out on opportunities to reduce shipping costs through aggregating shipments. Maybe you are missing out on opportunities to head off costly service calls through greater communication with the customer up front.

In addition, you need to know how you make money…”

More at WikiCFO.com

1

How to Develop a Daily Cash Report

The Daily Cash Report is used to report on the daily cash balance and to help manage cash on a weekly basis. This tool is especially useful when entering a situation where active cash management is required for your daily cash flow. The daily cash report template is used best as a tactical, active cash management tool. Knowing your daily cash position as well as your weekly cash commitments will give you added impetus to collect money and/or to generate revenues.

Why use a daily cash report? Often CFO/Controllers when facing a cash crunch manage cash by reviewing the online bank balance. Though easy to do this number is not accurate. It does not take into consideration outstanding checks. Another symptom of a cash crunch is that accounting falls behind in processing information. By preparing this daily cash flow forecast or projection you force the accounting department to stay current with posting transactions.

This tool is also helpful when used in conjunction with the Thirteen Week Cash Flow Projection. It is helpful to think of the 13-Week Cash Flow Report as giving you the strategic big picture needs, while the Daily Cash Flow Report provides a more tactical level measure of your firm’s cash position. You can tie a week’s worth of cash receipts and cash disbursements as reported in the Daily Cash Report to the 13- Week Cash Flow Report….

More at WikiCFO.com

0

 Download Free Whitepaper Today!

ACCESS NOW!