Overview

Main Menu Name: Cash Flow

Provides a one-year, month-to-month, listing of expenses that can be scheduled in advance. It totals the expenses by item and by month and provides a cash flow analysis of income and revenue on a monthly basis. The program also provides an annual summary of revenue and expense.

In this article:

• Background
• Why should I use this calculator?
• Getting Started
• Entering Data
• Results

Background

Aside from a balance sheet, the most important document necessary for financial planning is a statement of income and expenditures. This is essential to assess the present economic health of a client, to determine the extent of any excess discretionary income available for investing, and to control the timing of income and outgo.

Proper planning requires that you use comparative income and expense statements as a tool to determine the following items:

• Stability, reliability, and predictably of income and expenses.
• The potential for income growth.
• The relationship between income and lifestyle. For example, does income flow match standard of living?
• The relationship between income and investment accumulation. For example, how long has the present income level been maintained and has the level of investment risen with income growth?

We tend to forget the level and nature of our expenses. Consider which expenses are "excessive" and the extent to which the present levels of outlays have mortgages the future.

Timing is as important as tracking the amount and nature of income and expenditures. Although it is impossible (and unnecessary) to follow every dollar, it is essential that the timing of major sources of income and expense be recorded so that cash flow management can be aligned with personal objectives.

Why should I use this calculator?

• Summarize major expenses.
• Understand and control spending patterns.
• Encourage "putting yourself at the top of your own payroll" (paying yourself first is a key budgeting concept).
• Budget outflows to better coincide with inflows (address the importance of payment timing).
• Identify when surpluses will accumulate and when deficits may occur. This helps plan when to invest and when to borrow.

Getting Started

Aside from a balance sheet, the most important document necessary for financial planning is a statement of income and expenditures. This is essential to assess the present economic health of a client, to determine the extent of any excess discretionary income available for investing, and to control the timing of income and outgo.

Proper planning requires that you use comparative income and expense statements as a tool to determine the following items:

• The stability, reliability, and predictably of income and expenses.
• The potential for income growth.
• The relationship between income and lifestyle. For example, does income flow match standard of living?
• The relationship between income and investment accumulation. For example, how long has the present income level been maintained and has the level of investment risen with income growth?

We tend to forget the level and nature of our expenses. Consider which expenses are "excessive" and the extent to which the present levels of outlays have mortgages the future.

Timing is as important as tracking the amount and nature of income and expenditures. Although it is impossible (and unnecessary) to follow every dollar, it is essential that the timing of major sources of income and expense be recorded so that cash flow management can be aligned with personal objectives.

Entering Data

Enter the data into the two tabs (Expenses and Revenue) to get the monthly cash flow report.

Expenses Tab

1. Name: Enter the name of the client.
2. Year of Expenses:  Enter the year of the expenses.
3. List of Expenses:  Click Add to enter a new expense to the list. Click Edit to make a change to an existing expense. Click Delete to remove an expense from the list.

Revenue Tab

1. Beginning Balance:  Enter the beginning balance.
2. Monthly Revenue:  Enter the revenue earned for each month.

Results

The program gives a total of the expenses on a month-to-month and annual basis while calculating the "ending balance" for each month and for the year.