Do you understand how your cash comes and goes?

Do you know what your cash balance will be before it is too late?

Can you make a cash plan for next month or next year?

The tools to answer these and other questions are provided for you in this workbook.

As you navigate the frequently uncharted pathways of small business ownership, one of the most important responsibilities facing you is the ability to understand the cash requirements of your business. You must make this week's payroll, pay for a large shipment of inventory, pay your payroll and sales taxes, etc. These tasks are most likely the ones you are least prepared to accomplish. The result, then, is you are unable or unwilling to make a plan concerning your business's requirement for cash and its ability to meet that requirement.

You must have the confidence to understand that cash management and forecasting are not "mystical arts" practiced behind closed doors with chants and incantations. It is based on solid common sense and logic combined with a good understanding of your business's finances and financial statements. What you must do is build upon your understanding of your business financial statements and financial operations and learn a few simple concepts that will be presented to you in this workbook. Let's work together to develop an approach to cash flow management that you can understand and use.

The five topics of cash budgeting and forecasting are:

Definition - What is a cash forecast?

Purpose - Why do you need a forecast?

Time Horizon - What are your forecast period options?

Prerequisite - What must you have in place for a successful cash forecast?

Format - How should you organize your forecast?

We will consider each of these topics individually and build the foundation of understanding necessary for you to take control of your cash. When we have completed the foundation, we will consider a logical starting point.