Service 03

Planning and forecasting

An annual budget tells you almost nothing about whether Friday is going to be difficult. A rolling thirteen week cash forecast does, it fits on one page, and once it is built it takes about twenty minutes a month to keep honest.

Thirteen weeks, drawn from real bank history

The shape below is from an actual client, with the numbers taken off. Two things are visible from four feet away: the payroll rhythm, and week nine.

Week nine is a quarterly tax deposit landing two days before a payroll date. Nothing was wrong with the business that week. It was a calendar collision, it happens twice a year to almost everybody, and it is entirely survivable if you find out about it in week two instead of week nine.

What goes into it

  • Every payroll date and the deposit that follows ittaken from your own run schedule, not an average
  • Quarterly and annual filings, on the actual due datesthis is the half most spreadsheets leave out
  • Rent, insurance and anything else on a fixed datedated, not spread evenly across the month
  • Receipts, timed the way your customers actually paywe look at the last twelve months, not your terms
  • Loan and finance repaymentsincluding the ones that come out on a 29th

What stays out of it

  • Revenue you hope to winhope is not a cash flow line
  • A growth rate applied to everythingit makes the chart look better and tells you less
  • Anything that has not been agreed in writinga verbal order is not money in week six
  • Depreciation and accrualsthis is cash, not a result. those belong in the close

What this is not

It is not advice about what to do with the money. We are bookkeepers and payroll administrators. We can tell you that week nine is thin and why, and we can tell you which of the dates in it are movable and which are not. What you then do about it, whether that is a facility, a payment plan or a conversation with a customer, is your decision and in some cases one for a CPA or an attorney.

Associate Payroll Services, LLC is not an investment adviser, not a broker dealer and not an insurance agency. Nothing here is investment, legal or tax advice, and we take no commission from anybody for anything.

Building the first one is $640 and takes about a week. Keeping it current after that is $180 a month, and the workbook is yours either way.

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