02. How to Forecast your Cash Flow 52 Weeks into the Future & Get Ahead

Overview:

Learn how to build a practical 13- to 52-week cash flow forecast that can give you the visibility you need to make better decisions. This introductory course will help you understand the structure, fundamentals, and value that the cash flow forecast model can provide. We'll cover how to build it and why you should be excited to produce each it each week. Yes, each week!

This model will become a "rolling forecast" tool you can use with management teams on a weekly basis.

We will learn how to translate a Profit & Loss budget model to cash terms and apply "bottom-up" modeling fundamentals to the cash forecasting process. The techniques and methodologies I teach in this course I use with management teams on a regular basis.

While there are many software packages on the market to help with cash flow forecasting, I find that Excel can be used effectively to learn the basics of modeling, tell stories and convey complex ideas, and highlight cash flow risks & opportunities to management teams.

We will dive into:

• Forecasting the date you might run out of cash
• Building a bridge between a budget model and cash flow forecast
• Graphs, KPIs, and outputs that management can use to track performance in weekly or monthly cash reporting.
• Actuals vs. Forecast analysis: using this model as a weekly tool that compares forecasted cash flow against actual bank data. You will learn how comparing actual bank data enhances model accuracy.
• Translating P&L sales forecasts into cash receipts
• Modeling debt service schedules: terms loans & revolving lines of credit
• …and so much more!
  

Table of Contents (~3.5 hours):

0. DOWNLOADABLE EXCEL FILE: Cash Flow Forecast Completed Template

1. Introduction to Practical Cash Flow Forecasting
2. Cash Flow Forecast Model Structure
3. Sales Receipts and Sales Taxes
4. Rent & Occupancy
5. Insurance
6. Licenses
7. Purchase Orders
8. Payroll & Other Compensation
9. Other Expenses
10. Past Due Accounts Payable & Accounts Receivable
11. Term Loans, CAPEX, & Income Tax Schedules
12. Revolving Lines of Credit
13. Equity
14. Outputs - Cash Flow & Burn Period Totals
15. Outputs - Dashboards
16. Outputs - Graphs
17. Mapping Actuals, Bank Data, & Actual vs. Forecast Analysis
18. Final Notes