How to Create a Cash Flow Statement

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In a cash flow statement, a person itemizes expenses and estimates sales revenues in order to get an idea of how much money is coming in and going out each week. Create a monthly cash flow statement with help from the co-founder of a business advisory company in this free video on cash flow statements.

Part of the Video Series: Starting a Business
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Video Transcript

Today, we are talking about how to create a cash flow statement. We have a form here that we typically will use. This incidentally is available I believe at the SCORE website. And we use a very similar form, and what we do is we itemize all the expenses, and estimate all the sales revenues. And typically we will lay it out in a weekly bucket to where we are estimating how much money is coming in each week, as well as how much money is going out each week. We will typically look at things like rent, and utilities, office supplies. Some of these things will be paid once a month at the beginning of the month, the end of the month, and you can plug it in to the according bucket. Or depending on how close your cash flow is a lot of times we just divide it by four weeks, and put it in the buckets in a monthly fashion like that. So either way what you are really trying to do is get a weekly view of how much money is going to be in the bank. And it is amazing how many small businesses do not do this, and this is probably one of the biggest downfalls of small business that of the small businesses that don't succeed this is probably a large contributor. One thing I would recommend we use a book, and we recommended this to some of our accounting, bookkeeping clients. It is called "Never Run Out Of Cash" by Phillip Campbell, and he really he goes into a lot more detail than I am able to do here. But it would be a great help to anybody that is looking to develop a cash flow monitoring system.


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