Definitive Business Plan, Second Edition, The

Watching cash flow

Your cash flow projections have a clear bottom line – they show your cash position at the end of each month and, therefore, your cumulative surplus or funding requirement.

If you are in the happy position of having a surplus, you enter it in the cash at bank entry on the balance sheet, and everything should balance nicely. If the surplus is very large, you might want to review your strategy and see how you can make the surplus work for you.

If you have a deficit, make it bigger by deducting a working balance as touched on above. Enter the working balance as the entry for cash at bank, and enter the final deficit as your funding requirement. This can be either additional borrowing as shown, or funding, or a mix of the two. Ways ...