Be careful not underestimate your expenses. Failing to account for all your expenses could lead to a shortfall in cash during the course of operating your business. Expenses 1) Under CASH PAID OUT enter the amount you expect to pay under each category of expenses for the first month of your operations. 2) Repeat the step one for each month in the 12 month cash flow period. Don’t forget to include your salary under OWNERS SALARY. This is separate from any wages you pay to staff. 3) The formulas imbedded in the worksheet will automatically calculate and update the numbers for the row labeled SUBTOTAL, TOTAL CASH PAID OUT, and CASH POSITION and the column labeled TOTAL ITEM EST. 4) Review the row labeled CASH POSITION. This tells you how much cash you expect to have on hand at the end of the month. a. If the number is negative for any given month your business will run out of cash by the end of that month. b. If the number is positive for any given month your business will have a surplus of cash at the end of that month. The workbook’s formulas will carry forward any surpluses or deficits into the next month. Comparing Monthly Expenses and Monthly Income Once you complete entering your monthly income and monthly expenses in your budget, subtract your expenses from your income. If you are using a digital spreadsheet with formulas this will be done automatically (as above). You can now see how much cash you will have on hand at the end of each month.
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