Cash Flow Projection Templates for Business Plan or Financial Estimation

For any business venture, whether it is in the startup phase or a well-established one, proper planning and financial estimation are two essential points to work on new strategies for growth in the future. Without preparing before starting a business, the business might turn insolvent. And that’s a nightmare for every businessmen. So, it is critical for one to prepare a business plan and proper financial projection to foresee the feasibility of the business.

Focusing on cash flow projection is equally important – which is also called as Cash Flow Forecast – a set of financial statements that is all about projecting the cash flow or rather the movement of cash in and out, also included are the projected income and expenses of any business, organization or an individual over a certain or given time frame. 

By focusing and working on cash flow projection, you can calculate everything easily and know about the profit and losses in the coming financial year of the company. This will help the business estimate the timing on whether they will need to borrow, how much, when and how will they repay the loan. 

Working with a plain Excel sheet or from scratch can be time-consuming and inefficient since you will need to create it again and again. Rather than this, it is better to download Cash flow projection templates, ready-made and easy to edit, that you can get from a selected portal or web platform. 

Economics are at play, regardless of what you get for running your business, you need cash to operate. As the saying goes, “It takes money to make money”. It’s true in many ways, just like in an investment and interest rates on loans. Without profit, you can’t grow, so you need a healthy cash flow to keep the business going.

Calculating the Estimated Net Cash Flow isn’t all about how much money comes in and out but also when it comes and goes. What are your expenses patterns? What are the trends in your yield? Are there any changes in the cash flow on seasonal change? You’d need to assume a lot of circumstances that will affect the numbers and details that will make changes to make sure of the accuracy of your predictions and better your planning.

Cash Flow statement contains the cash flow of three sets of activities: Operating, Investing and Financing. Only the operations section deals with the question of direct versus indirect cash flows. As an example, at eFinancialModels, they are offering Cash Flow Projection templates which are shown in two different methods – Direct Cash Flow Method and Indirect Cash Flow Method.

As far as Direct Cash Flow method is concerned, it starts with presenting operating receipts and payments along with all other items – having an effect on cash flow, as soon as they occur. It is counted as the easiest method. However, it comes with a drawback and that is net working capital effects that are often neglected. 

Indirect method is counted as complete method in comparison to direct one. Usually all corporations prepare their statement of cash flows using this method. In the indirect method, you adjust the net income but adding the accrual converted into cash basis. So, non-cash expenses will be included with changes in the starting and ending account balances in current assets – excluding cash – and current liabilities for the period. 

This will help identify sources non-cash income and if these are masking serious problems in the business. Looking at the business’s feasibility will be much more accurate in this way, hence the companies preferring using the indirect method instead.

Jawaharlal Nehru once said, “Obviously, the highest type of efficiency is that which can utilize existing material to the best advantage”. If one can take the option of working efficiently then why not grab the opportunity? The same applies with downloading a Cash Flow Projection Template. 

There are a number of added benefits of downloading a good cash flow projection template as it influences business planning, budgeting and of course essential for the duration for decision-making process. In the offerings, you can choose either 1-year cash flow projection, 3-year cash flow projection template or for more time. Templates that are offered for 12 months projection usually serve budgeting purposes and at the same time as 3 years projection templates come with longer time financial plan. You have to download the best one of your choice and implement the changes based on your business plan. 

In conclusion: Cash flow projection templates are easy to edit and provide you a time-saving opportunity to create proper business plan or financial projection. You can download the right cash flow projection template according to your requirement for the betterment of your business planning.

Report this Page