A cashflow shows figures only when the cash has been through the bank account. We all have certain items that must be paid for at set times of the year, and it is important that these dates are not missed since there can be penalties and consequences. Understanding the timing of bills and managing them to best suit your income is not as difficult as it sounds.
How much do you have now? Add income as it is received and enter expenses in the month they are actually paid. Now add up the columns to calculate the month’s closing cash position. This becomes the next month’s opening cash position and the flow continues month after month. Knowing when cash is needed and when there is a surplus helps you stay in control of your money.
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