A cash flow projection is a statement that shows the expected cash inflow, the expected cash outflow and the expected cash balance within a reporting period. The statement is usually prepared and presented to finance providers for the purpose of getting finance (or loans) from the providers. It is usually prepared by the accountants for their clients.
To successfully prepare a good cash flow projection, the following are necessarily required:
1. Bank statement of the firm. This will reveal at glance all receipts and payment during the immediate past period.
2. Sales information of the firm. This will enable you to screen the receipts shown in the bank statement with a view to determining which of them are not sales.it will also guide you in knowing total sales and sales trend for the period.
3. Purchases information. This information will enable you know the total purchase and purchase trend during the period.
4. Debtors’ information. This will enable you reconcile total sales with sales receipts.
5. Creditor’s information. This will also enable you to reconcile the total purchases with payments for purchases.
To successfully prepare a good cash flow projection, the following are necessarily required:
1. Bank statement of the firm. This will reveal at glance all receipts and payment during the immediate past period.
2. Sales information of the firm. This will enable you to screen the receipts shown in the bank statement with a view to determining which of them are not sales.it will also guide you in knowing total sales and sales trend for the period.
3. Purchases information. This information will enable you know the total purchase and purchase trend during the period.
4. Debtors’ information. This will enable you reconcile total sales with sales receipts.
5. Creditor’s information. This will also enable you to reconcile the total purchases with payments for purchases.
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