Cash Planning

September 27, 2022

We know that for today’s business owners, cash is top of mind these days.  Business leaders are asking all things cash – how much do we need? When do we need it? Where do we get it?

There are three things that you can do this week to get on top of this and start feeling more confident about your business’ cash position.

  1. Review your historical financial information

Monthly bookkeeping is the foundation of your business’ financial health. Every month, your bookkeeper classifies all the transactions that hit all cash and credit accounts and reconciles balances to ensure that all transactions are included. Next they review your invoices and your bills that have come in and ensure these are captured; this shows your accounts receivable (future money to be collected) and your accounts payable (future bills to pay).

 Once your bookkeeping is complete for the month, look at:

  • The balance sheet: this shows a listing of all the assets the business owns and summarizes all the liabilities the business owes. This should include corporate taxes, sales taxes, and even vacation you will need to pay out in the future if employees leave.
  • The profit and loss statement: What were your sales for the period? What were your expenses? Are your sales more than your expenses? If not, where can you cut expenses? Do you need to raise your prices or increase your sales volumes?
  • The cash flow statement: Understanding the sources of your cash in and cash out ties all the financial statements together. The cash flow tells the final chapter of your financial story – has your cash position decreased or increased from the last period? Is it because of more sales? Did you sell an asset? Did you get financing?

Understanding where you’ve been and taking a deep dive into the business’ financial strengths and weaknesses will help prepare you for next steps.

  1. Make a plan

Using the historical information you have, make a plan for what you think the next year will look like. Break it down monthly with your best guesses. Do you know that sales increase over the winter holidays? Do you know if there is a slow time in the spring? Will you be hiring and training staff? Will you be onboarding new clients? Will your team be taking vacation?

Build a plan with a comprehensive set of assumptions. We like to start with a base case and include “what if” scenarios. What if we do way better in sales than we expected? What if our sales dry up and our expenses go up? Preparing for these “what ifs” helps us think holistically about variables that fall outside of our base case expectations.

There may be months where there isn’t enough cash to support the business operations. You’ll need to plan to inject cash into the business in those times. Financing takes time to secure, so networking with lenders and organizations supporting entrepreneurs is a good place to start. Put together your business plan and your financials to ensure that you have a lot of time to prepare for all the financing asks that will come your way and that you are equipped with a time buffer to float your business’ cash needs.

  1. Roll with the plan – and always adapt!

If there is anything certain in life, it’s that nothing is certain! Planning is a must-do, but it’s also important to recognize that there are variables we can’t control (hello global pandemic!). Using your plan as a guide, make adaptations as you go. Review your projections/budget to your actual results monthly. Look at your results as a quarterly bucket – and adjust as you need. Do you need to scale back services if your team is overwhelmed? Can you reduce expenses? Can you supply your team with bonuses? Are you able to make a financial contribution to support a social organization? Can you repay debt? Do you need more financing?

Monitoring your financial results will allow you to quickly make decisions that are relevant to your business, your market, and your team. Be fluid and adaptable; what works one month may not work another, so experiment. Be willing to make mistakes and take risks. Every consequence will be a learning opportunity and with a resilient and adaptable plan, will make your business stronger in the long term.


Understanding your business’ cash position and plan is one of the most critical pieces to your organization’s success. Starting with where you’ve been, knowing where you are, and planning for where you want to be will allow you to set the business up for cash flow success.

When you need help, call on experts. Reach out to our team to customize a cash flow plan for your business’ needs. We can help with:

  • Cleaning up your bookkeeping so you have solid financial reporting and a good foundation.
  • Developing projections and a budget to meet your goals.
  • Monitoring and adapting your projections and budgets to keep your business goals a reality.

Email us at to discuss your financial strategy!

Alicia Fowler