Cash flow calculator

Use this calculator to determine if the money coming into your business (i.e. revenue and income) is enough to cover your financial obligations (i.e. payroll and other expenses) for a set period. For a business to be successful in the long term, it needs to generate profits while also being cash flow positive.

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Analyze your cash flow with a free Wave account.

What is cash flow?

There are different types of budgets depending on what kind of performance measure you want to examine. Here, we’ll define a budget as a projection of how much your company will spend versus how much revenue it will generate over a period of time. Depending on the results, you can then make more informed decisions when it comes to managing your cash flow, allocating money for expenses, and setting revenue targets.

How to manage your cash flow like a pro

Your cash flow lies at the heart of your business. With proper cash flow management, you can minimize the possibility of a shortfall. Here are a few helpful tips:

  • Rather than just project your cash flow for an upcoming month, try to plan ahead for the year. This will help you anticipate slow periods so you can set aside enough cash to cover your expenses.
  • Getting paid on time – and in full – is key to managing your cash flow. See how you can get paid in as fast as 2 business days with a free Wave account.
  • One of the common mistakes made by new business owners is not keeping enough of a cash buffer on hand. To avoid this, try to maintain at least two months of operating expenses in your business savings account.
  • You can view automatic and up-to-date cash flow reports by using Wave's free business accounting software.
  • Check out our other accounting tools that can help you calculate sales tax, budget, burn rate, and more!

How to use the cash flow calculator

To calculate your cash flow with this free tool, follow these instructions:

  1. Under "Cash at beginning of term," enter the amount of money your business has available at the start of the fiscal period.

  2. Under "Cash flow from Operations," enter:

    • The amount of cash your business has received from customers and other sources
    • The amount of cash your business has spent on inventory, insurance, payroll, and other expenses

  3. Under "Cash flow from Investments," enter:

    • The amount of cash your business has earned from the sale of property and other investments
    • The amount of cash your business has spent on capital expenditures and other investments

  4. Under "Cash flow from Financing," enter:

    • The amount of cash your business has received from new loans, monetary gifts, and other contributions
    • The amount of cash your business has spent on loan repayments and similar payouts

  5. After filling these fields out, instantly see the net amount of cash your company will have at the end of the fiscal period.

Essential parts of a cash flow report

There are 3 main elements of a cash flow statement:

  1. Gross cash inflow: This is the total amount of money coming into your business; this includes money generated from selling your goods and services, money from loans or lines of credit, and other sources of incoming cash
  2. Gross cash outflow: This is the total amount of money exiting your business; this can be from making business purchases, generating inventory, paying sales taxes, paying back a loan or line of credit, payroll, and more
  3. Net cash change: This is the net difference between your cash inflow and cash outflow; you should strive towards having a positive cash flow (more inflowing cash than outflowing cash)

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

  1. asdas
  2. asdas
  3. asdasd
  4. asdas
  5. da
  6. asd
  7. asd
  8. asda
  9. asd
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There are 3 main elements of a cash flow statement:

  1. Gross cash inflow: This is the total amount of money coming into your business; this includes money generated from selling your goods and services, money from loans or lines of credit, and other sources of incoming cash
  2. Gross cash outflow: This is the total amount of money exiting your business; this can be from making business purchases, generating inventory, paying sales taxes, paying back a loan or line of credit, payroll, and more
  3. Net cash change: This is the net difference between your cash inflow and cash outflow; you should strive towards having a positive cash flow (more inflowing cash than outflowing cash)

Benefits of managing your business cash flow closely

  • Identify and plan for cash shortages in the upcoming year
  • Forecast your upcoming expenses and see exactly how much money you'll need on hand to cover rent, payroll, and any other recurring monthly expenses
  • Prepare for slow seasons and ensure you have enough money on hand before spending on your business
  • Become a better financial decision maker as you improve your cash flow projections each month

Cash flow calculator

FAQs

Why is cash flow important?

Cash flow is important because it shows the actual amount of cash you have to keep the lights on for your business. You need cash flow to:

  • Pay your regular bills (internet, rent, software, etc.)
  • Buy supplies, materials, and resources for your goods and services
  • Cover one-off expenses (repairs, large purchases, etc.)
  • Pay your employees
  • Cover other operating costs

Can cash flow be negative?

Yes, your cash flow can be negative. If your cash flow is negative, this means your business is spending more money than it makes, which is a problem in the long-run.

When you’re just launching your business, your cash flow will likely be negative as you spend money on the initial software, equipment, and other resources you’ll need to run your business.

If your business continues to have negative cash flow each month, though, you’ll need to find ways to reduce your costs and regular expenses in order to turn your monthly revenue into actual take-home income.

How are cash flow and profit different?

Cash flow and profit are slightly different metrics that you should monitor for your business. Cash flow shows you how much money you have at hand to cover costs and liabilities, based on cash coming in from sales and cash going out from business expenses. Profit shows you how much financial gain your business is earning from sales of goods and services. Running a profitable business requires you to maintain a positive cash flow.

How do I run a cash flow forecast?

Here are the steps you need to take to run a cash flow forecast for your business:

  1. Gather your financial documents: Grab any documents that show you how much money is entering and exiting your business in a given month; with accounting software like Wave, you can download P&L statements, balance sheets, invoice reports, tax reports, and payroll documents.
  2. Find your opening balance: Your opening balance is the balance in your bank account at the start of a given month. This should equal the closing balance at the end of the previous month.
  3. Estimate your receivables: Look at your financial documents and estimate how much money your business earns in sales and revenue each month.
  4. Estimate your payables: Look at your financial documents and estimate how much your business spends on rent, utilities, bills, marketing, payroll, and other operating expenses each month.
  5. Calculate your cash flow: Use your estimated receivables and payables to calculate your cash flow: Cash Flow = Estimated Receivables - Estimated Payables.
  6. Add cash flow to opening balance: Take the cash flow you calculated above and it to your opening balance you found above; this will provide you with a forecast of how much money you’ll end up at the end of the month.

How to manage your cash flow like a pro

Your cash flow lies at the heart of your business. With proper cash flow management, you can minimize the possibility of a shortfall. Here are a few helpful tips:

  • Rather than just project your cash flow for an upcoming month, try to plan ahead for the year. This will help you anticipate slow periods so you can set aside enough cash to cover your expenses.
  • Getting paid on time – and in full – is key to managing your cash flow. See how you can get paid in as fast as 2 business days with a free Wave account.
  • One of the common mistakes made by new business owners is not keeping enough of a cash buffer on hand. To avoid this, try to maintain at least two months of operating expenses in your business savings account.
  • You can view automatic and up-to-date cash flow reports by using Wave's free business accounting software.
  • Check out our other accounting tools that can help you calculate sales tax, budget, burn rate, and more!
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