Cash flow calculator

Our cash flow calculator can be used to estimate the amount of money coming in and going out of a business over a specific period. It typically takes into account income sources, expenses, investments, loans, and other financial transactions to determine the net cash flow.

Ian Hawkins

Page written by Ian Hawkins. Last reviewed on July 17, 2024. Next review due April 1, 2025.

Calculators

Step 1: fill in cash inflows

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This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

Your results

Total cash at the beginning of period

$0

Total cash in

$0

Total cash out

$0

Cashflow

$0

Cash at the end of period

$0

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What is the cash flow calculator?

Swoop’s cash flow calculator is a tool designed to help businesses measure and analyze their cash inflows and outflows over a specific period. This tool provides a clear picture of your financial health, helping you to plan and make informed decisions.

How does the cash flow calculator work?

The cash flow calculator works by inputting your financial data, such as income, expenses, investments, and liabilities. It then processes this information to provide an overview of your cash flow situation, showing whether your business is generating enough cash to cover its expenses and grow.

What is a cash flow calculator used for?

A cash flow calculator can be used to:

  • Track your business’s cash inflows and outflows.
  • Identify trends in your cash flow.
  • Forecast future cash flow to make strategic decisions.
  • Plan for potential shortfalls or surpluses.
  • Ensure your business maintains a healthy financial status.

Why is calculating cash flow important?

A cash flow calculator can assist you in a few fundamental things. It is crucial because it:

  • Helps manage your day-to-day operations.
  • Ensures you have enough cash to meet your obligations.
  • Enables you to make informed investment decisions.
  • Provides insights into the financial health and performance of your business.
  • Helps you avoid liquidity issues and potential insolvency.

How to calculate cash flow

To use our cash flow calculator, you would input the following information:

  1. Income: Include all sources of income, such as sales revenue, rental income, interest earned, etc.

  2. Expenses: List all expenses, including operating expenses (such as rent, utilities, salaries), taxes, loan payments, etc.

  3. Investments: If applicable, include any investments or capital expenditures made during the period.

  4. Loans and Financing: Enter any loan payments or financing activities, including both principal and interest payments.

Once you’ve entered this information, the cash flow calculator will calculate the net cash flow for the period, showing whether there’s a surplus or deficit of cash. This can help businesses and individuals plan for future expenses, manage liquidity, and make informed financial decisions.

How can you boost your cash flow?

Boosting your business’s cash flow is essential for maintaining a healthy financial status and ensuring smooth operations. Here are some steps to help you improve your cash flow:

Negotiate quicker payment terms

Ensuring your clients pay on time is crucial, especially after a big sale. Late payments can lead to a negative cash flow shortage as your accounts receivables grow. To avoid this, negotiate with your clients to move the payment deadline forward. You might also ask for a partial deposit upfront to get cash immediately.

If a client is late with a payment, chase it immediately. Consider investing in invoice management and accounting software that sends automatic payment reminders and keeps track of payments. Some software even accepts electronic payments.

Create customer incentives and penalties

Encourage clients to pay early by offering discounts. For example, offer a 2% discount if they pay within the first 10 days and 1% if they pay within 11 to 20 days. You could also offer discounts on future orders or gift certificates.

Charging fees for late payments is another option. However, clearly highlight these fees when drawing up the initial client contract and again when invoicing. Explain the fee amount and when it will apply.

Check your accounts payable terms

While speeding up the process of receiving payments, try to slow down making payments. When a bill arrives, read the terms to see how long you can wait before paying to reduce the risk of a cash shortage. There’s no harm in negotiating with your vendors for longer payment terms in return for your business.

Reduce unnecessary spending

Like personal finances, businesses should review their expenditure to find cutbacks and savings. For instance, if you’re covering expensive mobile phone bills for employees, see if you can switch to a better deal and save money.

Conduct an inventory check to list products that aren’t selling well. Instead of buying more, get rid of them, even at a discount. Products that don’t sell well tie up cash and hurt your cash flow.

Lease equipment instead of buying

Consider leasing equipment instead of worrying about high upfront costs. Leasing allows you to pay a fixed monthly fee, enabling smaller payments that don’t deplete your cash reserves. Be sure to check the lease terms carefully.

Study your cash flow patterns

A cash flow analysis helps prepare for positive or negative cash flow swings. Analysing your business history helps spot trends and patterns, allowing you to prepare for future swings ahead of time.

Create and maintain a cash flow forecast

Accurate cash flow forecasting is important for all businesses. It helps determine if you’re going to run out of money and allows you to plan ahead. It might help you assess whether you need to reduce overheads or find new investment.

A good cash flow forecast shows your business’s income and outgoings for a set period, whether a few weeks or several months. To do this, you’ll need to:

  • Collate all the cash coming into the business.
  • List all your planned expense payments.
  • Calculate the net cash balance.

These steps help predict when your cash flow might be positive or negative, allowing you to act accordingly. Positive cash flow for several months might indicate a good time to expand or invest. Negative cash flow for a while means taking steps to ensure sufficient cash to cover your bills.

If your business has been running for several years, use sales data from previous years to guide your estimates.

Consider invoice finance

Invoice finance can improve cash flow by borrowing money using your unpaid invoices. If you’ve issued invoices to clients but haven’t been paid, invoice finance lets you access that cash early.

The lender uses unpaid invoices as security for funding, typically advancing 75% to 95% of the invoice value upfront. The lender collects payment for the invoices directly from your customers, deducts a fee, and pays you the remaining balance.

This can be beneficial if you have high-value invoices that could affect cash flow if unpaid.

Boosting your business’s cash flow involves a combination of strategies, from negotiating terms to using financial tools. Implement these steps to ensure a steady and healthy cash flow for your business.

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