Make Life Easy, Steal this Cash Forecasting Template
There’s been a lot of talk about cash forecasting recently. Whether it’s a 13-week look ahead or 8-week cash plan or calculating your “cash burn,” they all mean the same thing:
How long will my cash last, given the mess we are in?
The real stink is that this won’t be the last time you ask yourself that question. The reason may change, but the question is the same.
And as many of our contractor friends know, this is a difficult question to answer. It depends on whether we are paying subcontractors or payroll. It depends on the weather. It depends on whether that job starts when we think it will. It depends on whether our payments come in like we think. It depends if our available Line of Credit changes with our Accounts Receivable.
Construction cash flow is part art and part science.
We get it. We struggled with the same questions and came up with two solutions to manage the cash flow problem. We’ve used them both for 15 years and found that each have a specific purpose, and both help you feel like you have control and direction.
- Top level financial forecasting – We use our proprietary software, the Atlas Growth Model, for financial forecasting (aka projections). Our done-for-you method takes financial data, backlog, sales funnel and a handful of assumptions and pulls it all together in an easy to read dashboard to provide forward looking financial visibility.
The purpose of top-level financial forecasting is to empower you with decision-making information in a fast, easy-to-read dashboard. We can estimate when and how much cash you’ll need and create what-if scenarios to show what happens if something changes (backlog, performance, billing and collection terms, etc.). To learn more about our services, you can visit this page.
- Detailed, easy cash forecasting – Detailed cash forecasting can be used to ensure that the company has enough liquidity to meet its overhead and payment needs for the short-term and can be used to manage the timing of payments. This method is more granular and looks at week-to-week cash needs. We created this template/method to provide a 6-week look ahead on cash flow. Our template takes current A/R, current A/P, and expected payments (payroll, loan payments, vendor payments, etc.) and forecasts a week-by-week look ahead of what you can expect to receive and what you have to pay out and quickly see what weeks look good and what needs attention. We have also been using this method to model the spending of PPP funds and have included this template in the free class. To get our template, as well a mini course on how best to use it, just click here. We know it’s a little tough out there right now, so we made it completely free, so you have one less thing to worry about!
The number one response we have had to these two tools is, “whew, I feel better.” Closely followed by, “I’ll sleep tonight” or “I know what to do.” We know they can help you too.
To learn more about our services, visit us here.