Black Ink: Cashflow Management Secrets Your Accountant Never Shared!

by

Tom Shay

PO Box 1577 St. Petersburg, Fl 33731 (727) 464-2182 www.profitsplus.org tomshay@profitsplus.org

Do you know these terms of accounting?
Profit & Loss Statement - This is also referred to as the Income
Statement. It shows the income, expenses, and tells you how much profit (or loss). It is usually created for each month. Some businesses have 13 four week accounting periods instead of the traditional 12 months.

Balance Sheet - The balance sheet indicates the value of the business. It
has a list of the assets and liabilities. It is similar to the financial statement you create when you go to the bank for a personal loan.

Current - On a balance sheet, current indicates anything that can be

expected to be changed to cash within the next 12 months if it is an asset. And if it is a liability, it is anything that is scheduled to be paid in the next 12 months.

Long Term - The opposite of the definition for current, these are assets and
liabilities that are not expected to change in the next 12 months. With regard to a loan that you would owe, while there is a part of the loan that would change from long term to current each and every month, most accountants move items from long term to current only once each year.

Cash Basis - Most people think they are on a cash basis accounting system.
This means that with the completion of each accounting period (usually a month), all of the bills have been paid and all of the outstanding balances have been collected. Technically, a business uses either a cash or an accrual based accounting system. Actually, many businesses do have accounts payable and accounts receivable that exist from month to month yet retain the identity of a cash basis accounting system for all other areas.

Accrual Basis - Again, we have an item that is the opposite of the previous

definition. With cash basis, there are incomes and expenses that have occurred over several months, but are posted in only one month (i.e. income tax, property tax, business forms) With accrual basis, these and other incomes and expenses are posted over several months to provide a more accurate picture of what occurred in your business in the past month.

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PO Box 1577 St. Petersburg, Fl 33731 (727) 464-2182 www.profitsplus.org tomshay@profitsplus.org

Petersburg.org tomshay@profitsplus.org .profitsplus.2 PO Box 1577 St. Fl 33731 (727) 464-2182 www.

Petersburg.org tomshay@profitsplus. Fl 33731 (727) 464-2182 www.3 PO Box 1577 St.org .profitsplus.

000 2. Petersburg.000 2.700 200 140 210 175 800 300 250 21.400 150 1.400) 12.585) (4.600 200 140 210 175 800 300 250 33.A 1 EZ Cashflow (TM) Cash Basis 2 3 For Month Ending: 4 5 Income Statement 6 Cash Sales 7 Cost of Goods Sold 8 Gross Profit 9 Gross Profit Percentage 10 11 Operating Expenses: 12 Wages 13 Payroll Taxes 14 Property Taxes 15 Rent 16 Telephone & Utilities 17 Repairs 18 Advertising 19 Accounting & Legal 20 Automobile 21 Bank Charges 22 Computer Operations 23 Dues & Subscriptions 24 Insurance .profitsplus.000 960 2.000 41.5% P C P P P P P P P P P P P P P P P C C 11.585) (9.125 (9.500 1.630 36.480 (4.575 200 140 210 175 300 800 100 300 250 1.450 25.5% 65.400 8. Fl 33731 (727) 464-2182 www.000 880 8.000 27.5% 70.550 36.275 23.370 22.725 36.000 2.085 4.org .465 4.400) 4.465 P P P C P C 265 (4.200 150 1.000 39.General & Workman's Compensation 25 Licenses & Taxes (not sales tax) 26 Office & Store Supplies 27 Outside Services 28 Travel 29 30 Total Operating Expenses 31 32 Operating Income 33 34 Other Income and Expenses: 35 Miscellaneous Income 36 Interest Income 37 Interest Expense 38 39 Net Income Before Taxes 40 41 Federal Income Tax 42 43 Net Income (Loss) B C D E 1/31 2/28 3/31 P C C P 62.850) 17.465 4 PO Box 1577 St.000 44.org tomshay@profitsplus.400 150 1.400) (9.

org . Petersburg.1 2 3 46 47 48 49 50 51 52 53 54 55 56 57 58 A EZ Cashflow (TM) Cash Basis For Month Ending: Cash Balance.000 840 9.162) 5 PO Box 1577 St.profitsplus.097 (14. Fl 33731 (727) 464-2182 www.400) 3/31 (14. End of Month B C D E P/C C 1/31 17.275 44.370 41.450 P C P C 42.627) 47.850 1.585) 2/28 9.465 C 39.627) 4.org tomshay@profitsplus.500 950 (14.445 54.445 (9. Beginning of Month Net income (Loss) Add: Cost of Goods Sold Less: Inventory Purchases of Previous Month Freight In of Previous Month Principal Payments on Loans Cash Balance.500 (4.

org .936 17.360 36.005 314.5% P C P P P P P P P P P P P P P P P C C 11.400 265 31.995 36.000 880 2.000 21.875 2.100 525 10.755 1.050 297.800 20. Petersburg.profitsplus.520 2.059 P P P C P C 1.600 3.000 40.640 23.524 6 PO Box 1577 St.400 150 1.000 2.000 548.A 1 EZ Cashflow (TM) Cash Basis 2 3 For Month Ending: 4 5 Income Statement 6 Cash Sales 7 Cost of Goods Sold 8 Gross Profit 9 Gross Profit Percentage 10 11 Operating Expenses: 12 Wages 13 Payroll Taxes 14 Property Taxes 15 Rent 16 Telephone & Utilities 17 Repairs 18 Advertising 19 Accounting & Legal 20 Automobile 21 Bank Charges 22 Computer Operations 23 Dues & Subscriptions 24 Insurance .org tomshay@profitsplus.600 1.700 200 140 210 175 300 800 100 300 250 1.General & Workman's Compensation 25 Licenses & Taxes (not sales tax) 26 Office & Store Supplies 27 Outside Services 28 Travel 29 30 Total Operating Expenses 31 32 Operating Income 33 34 Other Income and Expenses: 35 Miscellaneous Income 36 Interest Income 37 Interest Expense 38 39 Net Income Before Taxes 40 41 Federal Income Tax 42 43 Net Income (Loss) B O P Q 1/31 Totals Budget P C C P 64.605 1.500 1.5% 863.400 1.680 2.755 159.724 4.200 27.200 12.500 36.850 3.736 10. Fl 33731 (727) 464-2182 www.000 3.755 14.000 25.

1 2 3 46 47 48 49 50 51 52 53 54 55 56 57 58 A EZ Cashflow (TM) Cash Basis For Month Ending: Cash Balance. Beginning of Month Net income (Loss) Add: Cost of Goods Sold Less: Inventory Purchases of Previous Month Freight In of Previous Month Principal Payments on Loans Cash Balance. Fl 33731 (727) 464-2182 www.500 27.524 Budget C 40.214 566.709 7 PO Box 1577 St. End of Month B O P Q P/C C 1/31 15.000 890 16.org tomshay@profitsplus.709 1.320 15.000 11.org .profitsplus.755 Totals 17. Petersburg.640 548.005 P C P C 41.

Fl 33731 (727) 464-2182 www. Gross Profit Percentage . positive or negative.If your business has loans outstanding. 35. 32. Gross Profit .org . . 7. row 32. Petersburg. 8. . 8 PO Box 1577 St. C.If your business owns certificates of deposit (CD’s). 37.These rows represent the most common expenses on a financial sheet. this is the proper entry point for the income received from these investments. . January through December in the examples. Cost of Goods Sold .The letter P denotes that the row is composed of numbers that are copied directly from your financial sheet. 13. could be used to represent a fiscal year or calendar year. through N. or other sources of income of similarity. The letter C denotes that the row is calculated by the computer and should not be manually entered when you are performing forecasts.These notations. B. Operating Income . Q.An example of miscellaneous income would be the cash part of a dividend that would be received from being a member of a cooperative.The title of each item on your financial sheet and the cash basis template. . by row and column of the cash basis template Columns A. For Month Ending . 12.Calculated as 8% of row 12. 9. between row 8 and row 30. . .The first month of the next accounting year. Total Operating Expenses . 39. this is the traditional place for the interest that you have paid to those that have loaned money to you. Interest Income .The totals columns for the year represented by columns C through N. 36.The first through twelfth months of the current year.Provided so that you can enter your budget for the accounting year.This figure is calculated by multiplying your cash sales (row 6) by one minus the gross profit percentage (row 9). Rows 3. 30.The cumulative total of rows 12 through 28. through 28.This figure is taken from your profit and loss statement. Cash Sales -The gross cash sales for that particular month.This figure is calculated by taking your cash sales (row 6) and subtracting your total operating expenses (row 30). Interest Expense .EZ CASHFLOW™ Cash Basis A description. Net Income before taxes .profitsplus. 6. P.This row is calculated by taking the operating income. You can change the name of any of the rows without affecting any of the template. Expenses . Do not include any miscellaneous incomes.org tomshay@profitsplus. Changing this number will allow you to utilize the “what if” scenario that is a part of the template. Payroll Taxes . O. This could also be the place for entering the income from the rental of space within your building. Miscellaneous Income .Row 32 is the difference. This should be net of any returns.

55. 54. (row 56). Cash Balance. Net Income . (row 54).A repeat of row 43. and subtracting row 37. Beginning of Month (row 46).This number is provided by you for the first month.A projection of the income tax that your business will owe (hopefully. Changing this number also allows you to utilize the “what if” scenario to create your open to buy figure. End of Month .Calculated at 2% of row 54 of the same column. and then calculated by the template for the balance of the cash flow chart. In columns D through O. Federal Income Tax . Freight In of Previous Month. (row 51). 41. there is a profit). Petersburg.This number is provided by you to reflect the amount of inventory purchased during the previous month.This row is calculated by taking Net Income Before Taxes (row 39). adding Cost of Goods Sold. Inventory Purchases of Previous Month . Fl 33731 (727) 464-2182 www.org . Principal Payment on Loans . 51. Beginning of Month . and Principal Payments on Loans. 46. Cost of Goods Sold . 43.The amount of principal that you repay to loans outstanding. row 46 is a repeat of row 58 in the previous column. 48. 9 PO Box 1577 St.The total of Cash Balance. Net Income . (row 41). Freight In of Previous Month . and subtracting Inventory Purchases of Previous Month.A repeat of row 7. (row 55). Cash Balance.adding rows 35 and 36. 58. and subtracting Federal Income Tax.org tomshay@profitsplus. 56.profitsplus.

400 150 1. Fl 33731 (727) 464-2182 www.985 (2.5% 70.040 875 3.000 2.000 39.450 25.700 200 140 210 175 300 800 300 250 24.340 1.000 44.400 150 1.060 PO Box 1577 St.575 200 140 250 210 175 300 300 800 100 300 250 1.500 1.profitsplus.000 41.200 2.000 24.370 22.240) 1.General & Workman's Compensation Licenses & Taxes (not sales tax) Office & Store Supplies Outside Services Travel Total Operating Expenses Operating Income Other Income and Expenses: Accrued Income Interest Income Interest Expense Net Income Before Taxes Federal Income Tax (Accrued) Net Income (Loss) 10 P C C P 1/31 2/28 3/31 62.025 350 675 1. Petersburg.000 1.630 36.550 36.000 960 875 3.200 150 1.200 1.org .org tomshay@profitsplus.210 P P P C P C 1.900 (175) 13.5% P C P P P P P P P P P P P P P P P P P C C 12.355) 12.000 875 3.600 200 140 210 175 300 800 300 250 23.200 265 (890) 350 (1.725 36.5% 65.1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 A EZ Cashflow (TM) B Accrual Basis C D E For Month Ending: Income Statement Gross Sales Cost of Goods Sold Gross Profit Gross Profit Percentage Operating Expenses: Wages (Including accrued) Payroll Taxes Property Taxes (Accrued) Rent (Including accrued) Telephone & Utilities Repairs Advertising Accounting & Legal Automobile Accounts Receivable Written Off Bank Charges Computer Operations Depreciation (Accrued) Dues & Subscriptions Insurance .000 2.000 2.410 350 2.275 23.

Petersburg. Fl 33731 (727) 464-2182 www.000 6.400 - P P P P C C (18. Beginning of Month P/C 1/31 2/28 3/31 17.462) (962) (15.732) .200 1.500 950 3.757) (1.000 300 350 44.060 (1.500 (962) (16.275 1.450 1. Cash Freight In Inventory Purchases.000 250 300 350 41.000 80 875 1.150) 675 (1.975) 18.000 1. Delayed Payment Wages Property Taxes Rent Federal Income Tax Non-Operations Related Cash Receipts(Payments): Sale of Equipment Purchase of Equipment Loan Principal Payments Cash Infusion from Loan Net Cash Increase(Decrease) Cash Balance.000 - 42.097 6.000 300 350 P - - - C 1.000 840 8. End of Month 11 PO Box 1577 St.200 1.795) (16.1 2 3 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 A EZ Cashflow (TM) B Accrual Basis C D E For Month Ending: Statement of Cash Flows Cash Balance.240) (12.org C P C C P C C C 39.000 80 875 1.370 1.480 6.220) 2.profitsplus.200 C C C P P P P 40.757) Net Income (Loss) (Increase)Decrease in Accounts Receivable C C (1.000 - 40.org tomshay@profitsplus.650) Add: Accruals/Non-Cash Expenses Included in Income Statement: Cost of Goods Sold Wages Payroll Taxes Property Taxes Rent Accounts Receivable Written Off Depreciation Federal Income Tax Cash Receipts Not Included in Income Statement: Accrued Income Received Less: Accruals/Non-Cash Income Included in Income Statement: Accrued Income Cash Payments Not Included in Income Statement: Inventory Purchases.000 80 875 1.

752 40. 90 Days Purchases.370 316.850 5.profitsplus.000 40. 60 Days Purchases. 60 Days Purchases. Petersburg. Cash Purchases. 30 Days Payments.500 950 365.000 12. Beginning Purchases. Beginning Purchases. Ending P/C C C C C P/C P P P P C C C C C P/C C C C C C C C C C 1/31 2/28 3/31 14.400) 8.450 322.450 12 PO Box 1577 St.752 14.000 42.850 27.400 8.592 44.780 27.000 3.150 13.400) 10. Ending Inventory. 90 Days Payments.1 2 3 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 A EZ Cashflow (TM) B Accrual Basis C D E For Month Ending: Balance Sheet Accounts Receivable.000 (5. Total Payments.000 47.850 2.947 39.400 250 26. Total Freight In Cost of Goods Available for Sale Cost of Goods Sold Inventory.000 840 366.500 5.370 316. Beginning Add: Credit Sales Less: Collections Less: Write Offs Accounts Receivable.142 16.350 29.000) (3.org .027 41.000 12. 90 Days Purchases on Credit.000) (3.000 11.450 54.000 (3.400 8.850 26. Ending Inventory Payable.850 1. 60 Days Payments.577 42.000 5.450 14. Total Inventory Payable.097 355. 30 Days Purchases.org tomshay@profitsplus.275 323.577 3.850 14.000 2.020 323.370 14. 30 Days Purchases.000 3.000) 16.000 3.000 2. Fl 33731 (727) 464-2182 www.150 300.

005 314.200 23.000 548.400 150 1.786 13.875 2.100 3.400 1.200 12.874 4.135 (1.org tomshay@profitsplus.200 (575) 350 (925) 14.000 960 875 3.A 1 EZ Cashflow (TM) Accrual Basis 2 3 For Month Ending: 4 Income Statement 5 6 Gross Sales 7 Cost of Goods Sold 8 Gross Profit 9 Gross Profit Percentage 10 11 Operating Expenses: 12 Wages (Including accrued) 13 Payroll Taxes 14 Property Taxes (Accrued) 15 Rent (Including accrued) 16 Telephone & Utilities 17 Repairs 18 Advertising 19 Accounting & Legal 20 Automobile 21 Accounts Receivable Written Off 22 Bank Charges 23 Computer Operations 24 Depreciation (Accrued) 25 Dues & Subscriptions 26 Insurance .000 2.050 301.profitsplus.General & Workman's Compensation 27 Licenses & Taxes (not sales tax) 28 Office & Store Supplies 29 Outside Services 30 Travel 31 32 Total Operating Expenses 33 34 Operating Income 35 36 Other Income and Expenses: 37 Accrued Income 38 Interest Income 39 Interest Expense 40 41 Net Income Before Taxes 42 43 Federal Income Tax (Accrued) 44 45 Net Income (Loss) 13 B O P Q 1/31 Totals Budget P C C P 64.000 25.640 23.000 3.850 3.674 PO Box 1577 St.360 36. Fl 33731 (727) 464-2182 www.5% 863.600 1.209 P P P C P C 1.700 200 140 275 210 175 300 300 800 100 300 250 1.000 25.000 40.5% P C P P P P P P P P P P P P P P P P P C C 12.500 1.org .520 2.800 20.680 250 2.600 3.400 265 27.736 10.775) 159. Petersburg.600 525 10.995 36.500 36.

Beginning of Month 50 51 Net Income (Loss) 52 53 (Increase)Decrease in Accounts Receivable 54 55 Add: 56 Accruals/Non-Cash Expenses 57 Included in Income Statement: 58 Cost of Goods Sold 59 Wages 60 Payroll Taxes 61 Property Taxes 62 Rent 63 Accounts Receivable Written Off 64 Depreciation 65 Federal Income Tax 66 67 Cash Receipts Not Included in Income Statement: 68 Accrued Income Received 69 70 Less: 71 Accruals/Non-Cash Income 72 Included in Income Statement: 73 Accrued Income 74 75 Cash Payments Not Included in Income Statement: 76 Inventory Purchases.000 12. Fl 33731 (727) 464-2182 www. End of Month 14 B O P Q 1/31 Totals Budget P/C C C (4.000 275 300 350 548.500 12.500 12.000 960 10.200 P P P P C C 1.profitsplus.000 250 3. Petersburg.000 800 - 519.000 11.674 (21.571) PO Box 1577 St.300) C P C C P C C C 40.571) (925) 395 17.000 4.org tomshay@profitsplus.000 80 875 1.581) (22.960 10.005 12.300 46.200 P - 14.990 (2. Delayed Payment 79 Wages 80 Property Taxes 81 Rent 82 Federal Income Tax 83 84 Non-Operations Related Cash Receipt (Payments): 85 Sale of Equipment 86 Purchase of Equipment 87 Loan Principal Payments 88 Cash Infusion from Loan 89 90 Net Cash Increase(Decrease) 91 92 Cash Balance.200 14.640 1.400 C 1.400 C C C P P P P 40. Cash 77 Freight In 78 Inventory Purchases.A 1 EZ Cashflow (TM) Accrual Basis 2 3 For Month Ending: 47 Statement of Cash Flows 48 49 Cash Balance.600 4.org .500 23.071) (4.

400 15.350 46.000 800 369.000 172.295 40.350 565. Beginning Purchases.920 275 34.org . 90 Days Payments. Total Inventory Payable. Total Payments. 90 Days Purchases.300 876. Beginning Add: Credit Sales Less: Collections Less: Write Offs Accounts Receivable. Ending Inventory. 90 Days Purchases on Credit.250) (13.295 17.400 15. Ending P/C C C C C P/C P P P P C C C C C P/C C C C C C C C C C 1/31 Totals Budget 35. Fl 33731 (727) 464-2182 www.300 300. 30 Days Purchases. 60 Days Payments.300 548. Total Freight In Cost of Goods Available for Sale Cost of Goods Sold Inventory.050 250 35. Ending Inventory Payable. 60 Days Purchases.000 (17.000) - 15 PO Box 1577 St.800 12.640 328.1 2 3 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 A EZ Cashflow (TM) B Accrual Basis O P Q For Month Ending: Balance Sheet Accounts Receivable.905 328.000 11.250 13.400) (15. 60 Days Purchases.000 17.600 151.profitsplus. Beginning Purchases.org tomshay@profitsplus. Petersburg. Cash Purchases. 30 Days Purchases. 30 Days Payments.000 40.005 328.350) (46.000 519.455 - 14.250 13.300 12.095 40.

The totals column for the year represented by columns C through N. 6.This figure is calculated by multiplying your gross sales (row 6) by one minus the gross profit percentage (row 9). Expenses .Calculated as 8% of row 12. row 34. Do not include any miscellaneous incomes. Total Operating Expenses . 39. Changing this number will allow you to utilize the “what if” scenario that is a part of the template. . Payroll Taxes . January through December in the examples. . between row 32 and row 8. You can change the name of any of the rows without affecting any part of the template. . For Month Ending .The gross sales for that particular month. Q.org tomshay@profitsplus.This row is calculated by taking the operating income. 7.This figure is calculated by taking gross sales (row 6) and subtracting cost of goods sold (row 7). 38. 8. P. this is the proper entry point for the income received from these investments. . adding rows 37 and 38. Interest Income . Gross Sales . positive or negative. .EZ CASHFLOW™ Accrual Basis Columns A.If your business owns certificates of deposit (CD’s). O. Net Income Before Taxes .These notations.This figure is taken from your profit and loss statement.If your business has loans outstanding.The first through twelfth months of the current year.The cumulative total of rows 12 through 30. Cost of Goods Sold . Accrued Income . 16 PO Box 1577 St.The first month of the next accounting year. 32.This row allows you to enter an income that is paid to you in one or two installments. 9. you are estimating the total annual income and recognizing it in 12 monthly installments. B. 34. Gross Profit Percentage .The difference. 37. . 41. C. Operating Income .The title for each item on your financial sheet and the accrual basis template. Petersburg. through 30. Rows 3. Gross Profit .profitsplus. By establishing it as an accrued income. Fl 33731 (727) 464-2182 www. This should be net of any returns.These rows represent the most common expenses on a financial sheet. and subtracting row 39.org . this is the traditional entry place for the interest that you have paid to those that have loaned money to you.The letter P denotes that the row is composed of numbers that are copied directly from your financial sheet. can be used to represent a fiscal year or calendar year. 13. Inte rest Expense . through N. 12.Provided so that you can enter your budget for the accounting year. The letter C denotes that the row is calculated by the computer and should not be manually entered when you are performing forecasts.

Petersburg. Fl 33731 (727) 464-2182 www. Accounts Receivable Written Off . Property Taxes . 78. Accrued Income Received . 59. 61. Net Income . This is a repeat of row 103.This row is 8% of row 59. Inventory Purchases. This row accommodates the business that pays an annual override on their sales. This row will be a number provided by you. you will see a decrease in the amount of cash on hand at the end of the month. Delayed Payment .This the total of rows 104 through 106. 79. should equal the total for row 81. In the example.This is the row to enter the actual payment of the property taxes. the number is provided by you. and the total of this row for columns C through N. Depreciation does not appear again on the cash flow chart as this is not an actual cash item. The actual payment of the federal income tax is made on row 82. 76. This row is designed for the cash portion of a dividend from a cooperative. 49.This is a repeat of row 7. Rent . Depreciation . and represents the amount of wages from row 12 that are not actually paid during the current month. Freight In . Net Income .This row is a reversal of row 24. or note portion of this income does not appear on the cash flow chart. Wages . as this item was never actual cash on hand. is accrued in the same manner as row 37. 62.This is the row in which you recognize the actual receipt of the accrued income. 63. and for columns D through O. Inventory Purchases. 45.The amount of inventory that is purchased and paid for during this month. Cost of Goods Sold .This figure. The actual payment of the property taxes will be denoted in row 80.This is a reversal of row 14. this row is calculated and is the same as row 90 in the previous column. Cash Balance. Example: D49 is the same as C92. Federal Income Tax . 80. and have charged that amount to their financial sheet each month. Payroll Taxes .This is the row to accommodate the third payroll of the month if you are using the accrual method of payroll and are paying bi-weekly. If you increase the ending balance of your accounts receivable.This row accommodates the business that is paying their employees on a weekly or bi-weekly basis.This is a reversal of row 37.This number is supplied by you for column C.43. 60.This is a repeat of row 45.profitsplus. The CD.This is a repeat of row 21. 17 PO Box 1577 St. (Increase) Decrease in Accounts Receivable . 58. 68. Cash . and hopefully you have a need for this figure.This is a repeat of row 108. Accrued Income . Property Taxes .org .org tomshay@profitsplus.This is a reversal of the accrual that you have made for rent each month. In our example. Beginning of Month . 73. Wages . 64. This is done because the accounts receivable written off do not affect your cash flow. 51. 77.This is a reversal of row 43. 53. 65. Federal Income Tax .This row represents a change in the amount of accounts receivable each month.This row is a result of the number in row 41 and subtracting row 43.

Fl 33731 (727) 464-2182 www. 104. For columns D through O.This is the row to enter the amount of principal paid towards any loans outstanding. 85. 82. 99. and the changes shown in rows 97 through 99. Purchases. Row 92 is also copied to row 49 of the following column to give the cash balance. If your percentage is different. 97. Purchase of Equipment .The beginning number in column C is provided by you. Beginning . we have chosen to take all of the write offs for the year in one month. and represents the balance of your accounts receivable at the beginning of the month.profitsplus. 98.org tomshay@profitsplus. Again. 86.If you have been accruing rent due to a sales override lease. 96. 87. End of Month . The calculation is show as being 95% of the credit sales of the previous month. For columns D through O. Cash .This row is the difference of row 96. Purchases. It is done so at 20% of the gross sales in row 6. This number is provided by you. Federal Income Tax . this number is calculated and comes from row 100 of the previous column.If you have need of cash because of anticipated cash deficits. which will affect the ending balance of your accounts receivable. Cash Balance. this number is provided by you. This number in one column will become the number in row 96 of the following column. as demonstrated in this example.This row is designed to allow you to receive additional cash.81. you will need to change the formula.This is the amount of inventory that you have purchased during this month which is to be paid for during this month. 90.In column C. Rent . you will need to change the formula.This is the row to enter the actual payment of federal income taxes. Notice that this chart allows for less than 100% collection of your credit sales.This is the row to enter the payment for equipment purchased.This is the row where the uncollectible accounts are written off. Sale of Equipment . beginning of month. this number is calculated as a result of rows 103 through 110. Collections . Accounts Receivable. Cash Infusion from Loan . 100. 88. In our example. This number is provided by you. this is the row to enter the amount of cash received.This is the amount of inventory that you have purchased during this month which is to be paid for during the next month. 102. Example: Row 92 in column C is the same as row 49 in column D. 30 Days .This row is shown as being calculated. Credit Sales .This row is the difference of row 49 and row 90. Ending . 92.org . 18 PO Box 1577 St. The example given is that of the sale of equipment. Accounts Receivable. Net Cash Increase (Decrease) . Loan Principal Payments . Less Write Offs .This row is shown as being calculated. 103. this is the row in which you enter the overage payment s. Petersburg. Beginning .This row represents the summation of rows of 51 through 88. if your percentage is different. Inventory.

60 Days .This number is provided by you for column C. 19 PO Box 1577 St. 60 Days . Example: E119 is a repeat of C105. 117. Example: F120 is a repeat of C106. Purchases. Example E118 is a repeat of D104.105. 120. Total . 118. This number is provided by you. 116.This row is a repeat of row 104 from the previous column. Fl 33731 (727) 464-2182 www.Ending inventory is calculated by subtracting the cost of goods sold (row 110) from the cost of goods available for sale (row 109). 106.This is the amount of inventory that you have purchased during this month which is to be paid for two months from now.This row is a repeat of row 106 from the column three back. 30 Days . 90 Days . Cost of Goods Available for Sale . and row 121 of the same column. For columns D through O. Cost of Goods Sold . Purchases.This is a repeat of row 105. Purchases on Credit. Inventory Payable. Beginning . Purchases. Inventory Payable.This row is the total of rows 114 through 116.The total amount of inventory added during this month. Payments. Purchases.This is a repeat of row 104. Purchases. 113. Payments. This number is provided by you. 115. 121. Total .Row 121 is the sum of rows 118 to 120 of the same column. Freight In . Payments. Purchases. 111. 109. It provides for the payment of inventory that was received 30 days earlier. It provides for the payment of inventory that was received 90 days earlier.org tomshay@profitsplus. 107. It provides for the payment of inventory that was received 60 days earlier. 60 Days .Row 122 is the sum of row 113.This is the amount of inventory that you have purchased during this month which is to be paid for three months from now.This row is a repeat of row 105 from the column two back. Ending .org . row 117.The cost of goods available for sale is calculated by adding the beginning inventory (row 102).profitsplus.The cost of goods sold is a repeat of row 7. 122. 119. purchases total (row 107) and freight in (row 108). Total . Payments. 30 Days . 90 Days . 108. Ending . 110. Inventory. Petersburg.This is a repeat of row 106.This is calculated as 2% of row 107. This is the total amount of dollars that you will pay out for inventory for this month. this number is a repeat of row 122 of the previous column. 114. 90 Days . It is the total of rows 103 through 106.

The book includes a computer disk which has the formats for installation on your computer.00 or get all four for $30. • EZ Cashflow™ Accurately create and see each of your next 12 financial statements today. • Relationship Selling Skills Big Deal! The deck of cards to be used to create an interactive educational event for your employees for their learning how to work better with customers.Save your time when you visit Tom Shay’s Profits+Plus table of tools today. Fl 33731 (727) 464-2182 www. • 100 Profits+Plus Ideas for Power Managing • 100 New Profits+Plus Ideas for Power Managing Business building and managing ideas that have been proven to work for business to increase profits and eliminate expenses. A CD created in Adobe pdf format.95 each) Big Deal Cards. Check the items you need for your business. • What does Tom say? • What else does Tom say? Each is a collection of 50 of the best of Tom Shay’s columns from 40+ trade journals and magazines. State.00 EZ Cashflow™ is $25. • 100 Profits+Plus Ideas for Power Promoting • 100 More Profits+Plus Ideas for Power Promoting Advertising and promotional ideas that have been proven to work at little or no cost.00 Each Ideas book is $8. • Power Posters Collection 26 in the series. and motivation. this book is readable with any computer.95) Power Posters Collection is $10. What else does Tom say? $15. education. Each of the items on this order form has a special “today only” price which is my way of saying thanks for attending this presentation. providing inspiration. Petersburg.profitsplus.00 (Usually $18.org . Zip _____________________________ Charge card# ______________________________ Signature _________________________________ Expiration ______ E .org tomshay@profitsplus.00 (Usually $28.mail address __________________________________________ 20 PO Box 1577 St. Prices are approximately 20% higher on the Profits+Plus website. What does Tom say?. • Get the complete set of Profits+Plus Tools for $110. and complete the order form below.00 (Usually $9.00) EACH ITEM SOLD WITH A GUARANTEE TO MAKE YOU MONEY! Name _____________________________________ Address ___________________________________ City.

and inventory. However if an estimation of the federal income tax due is divided by 12. the scenario can apply to any type of business. Follow this section with rows of information about the expenses. The first is a cash basis income statement and the second is an accrual basis income statement. items from the business’ entire existence are included. and rent. the sequence is exactly as described. select items (cash on hand. accounts payable. beginning of month). which affects only one month of cash flow. often with a facial expression that is indicative of how the financial sheet looked. Is this an exaggeration of the monthly ritual? In many businesses. you would examine your past 12 financial statements for the appropriate numbers. an action that will likely greatly affect that month’s statement. While the logic does make sense. At larger businesses. insurance. For those who have not experienced a cashflow sheet. Obviously a sale on a 30 day credit basis affects the cash flow sheet over two months as compared with the cash sale. A business utilizes one of two styles of income statements. accounts receivable. All of these rows of entries share a commonality in that they affect the checking account of the business. imagine a column for each of the next 12 months. the business may see a trend that can be avoided or promoted as the situation dictates. Regardless of the size. Fl 33731 (727) 464-2182 www. an office manager might perform this exercise. The business person then takes the financial sheets back to their office. today’s versions utilize computer spreadsheet programs and provide answers within a few moments once the format is created within the software. The income statement is the story of what the business has done for the last month. as well as many other expenses (or income) that is created by the events of more than one month. we can look at one of the many items that appear on the statement. To make each of the columns tie together. inventory. end of month) becomes the first line of the next column (cash on hand. even though many businesses own computers and are able to generate preliminary financial sheets. all of which is delivered to the accountant for SHAY’S WAY the appropriate processing. Between your income state- PO Box 1577 St. the answer is no. a file folder begins to fill with various sheets of information. “I have the numbers ready. the accountant will review the monthly financial sheets with their client. Because the taxes are both paid and entered into the books in March. The federal income tax due on March 15 can be entered into the books for the month of March. the owner of a business performs a monthly ritual. the accountant calls the business owner or manager. and during this time the gross sales. it can also be likened to deciding which direction to drive a car by looking in the rear view mirror to see where you have been. The cash flow sheet allows a business to anticipate the opportunities and pitfalls that present themselves to the decision makers within the business.profitsplus. the last line of information is the cash on hand balance on the last day of the month. with this lesser amount being entered on each of the 12 income statements. you will notice the last line on one column (cash on hand. It reflects the incomes and all of the expenses charged to that month. The balance sheet is the financial strength of the business. As the income statement is created at the end of the month. let’s look forward as we decide where the business is going. With accrual. followed by sales information and the types of sales. Petersburg. why not create them only once a year for the necessary tax purposes? The answer will probably be that in observing the sheets for several months. The meeting lasts approximately an hour. this type of accounting is referred to as cash basis accounting. which prompts me to ask. each of the 12 months will now have a financial sheet that is more reflective of the true income and expenses of the month. there is an alternative. At the meeting. businesses have long depended on the two traditional sheets: the income statement (also known as the profit and loss statement). gross margin. Within the next couple of Business Advice weeks. The story begins with the first day of the month and ends with the last day.Take control of your cash flow by Tom Shay Sometime during the middle of the month. maybe a couple of expense items. The first row of information is the cash on hand on the first day of the month. The tool necessary to turn our head from looking exclusively at the history to primarily looking forward is a cashflow sheet. and the balance sheet. visualize 12 columns of information that are a hybrid of the income statement. payments toward accounts payable and collection of accounts receivable. The example of federal income tax can be extended to include wagers. Fortunately for all businesses. net income and a few others) are updated as a result of the last 30 days of business. And when this calculation is completed. and the bottom line are reviewed.” is the traditional beginning of the conversation.org tomshay@profitsplus.org . With this backdrop of information. files them in the appropriate cabinet and returns to work. the business is utilizing an accrual basis accounting system. “If you are not making decisions in a timely manner from the financial sheets you receive or create each month. Again. For too many businesses. To enter the correct information for each of the cells (the intersection of a row and column). Stepping back to observe the available material. So how do you create the cashflow sheet and what can you use it for? While earlier versions of cashflow sheets were created using multicolumn ledger sheets and an adding machine. To explain the difference. and you have created a cashflow sheet. as well as purchases and sales of fixtures.

It allows businesses to see well in advance any and all months in which their business would experience a cash shortage. As you change each cell to indicate what you expect Business Advice is going to happen from what did happen last year. The cash flow sheet would show the depth and duration of the cash shortage. there is not a strong case to be made in defense of creating the tool.000 through increased sales. the failure to utilize information can not only be dangerous. it can be the best tool in your management arsenal. You can start by anticipating the sales for each month as well as the SHAY’S WAY expenses. Perhaps there is truth in the idea that a little information can be a dangerous thing. Petersburg. if you are not going to make decisions from the information you receive. Lastly. You may find that giving a $1. the situation would instead be taken in stride if a cash flow sheet were present. The cash flow sheet is more than a piece of paper. from the experiences of several businesses that have had cashflow deficiencies. Using your cash flow sheet. you can create an incentive program which could be a powerful tool in training this salesperson to stress the quality and services of your business. the cash flow sheet can be used as a motivational tool. After creating this cash flow sheet. it can prelude the failure to take advantage of opportunities or even the failure of the business. calculate the total sales this person would produce each year if he or she had an acceptable margin. you can eliminate sleepless nights while you impress your financial advisors and creditors with your ability to manage money. There is.ment and balance sheet. Another opportunity for use applies to businesses that utilize an outside person. Do you think you need an extra employee? Once you add this expense to your current wages.org . And if you believe the new employee will increase your sales. which is reflective of the past 12 months. all of the necessary figures are at hand. Utilizing your cash flow sheet.org tomshay@profitsplus. insurances and payroll taxes. If you have had the experience of the salesperson who habitually brings in orders with lower margins. an abundant supply of possible decisions to be made. PO Box 1577 St. however. But in addition to having too little information. With this new tool in hand what can you do to utilize it? After all. Fl 33731 (727) 464-2182 www. for how long and what type of interest rate and payment plan would work with the needs of your business. worry and sleepless nights. you can make this entry as well. Though this problem usually leads to concern.000 bonus to this salesperson can create an additional $5. and you will see the increase in your profits.profitsplus. you can begin to ask yourself questions about where you believe your business is going. Knowing that dollar amount. Let’s look at several examples. Needless to say. you would be equipped to visit your banker with a plan of action stating how much money you would need. you will notice the last line (cash on hand) changes to reflect how the new entry will affect your cash on hand for not only the current month but each of the succeeding months. a cash flow sheet provides an opportunity to foresee the problem and take corrective actions. and see if you are now a more profitable business or one that is just trading dollars. you will see if you have the necessary cash on hand.

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