Now that you have completed this booklet, you have one more set of tasks to accomplish as you begin to utilize the cash forecasting ideas presented.

1. Make a commitment to yourself and share it with another person that you are going to develop successful procedures to make a cash budget for your business and share this resolution with another person.

2. Set up folders for each step that must be accomplished, such as sales forecast, accounts receivable collection analysis, individual expense analysis, etc.

3. Prepare the sales forecast.

4. Prepare the accounts receivable collection patterns analysis if your business has credit sales.

5. Analyze inventory purchase patterns, by vendor if necessary.

6. Analyze individual expense accounts and learn their relationship to sales.

7. Analyze your payroll, debt payments, taxes, etc.

8. Prepare the "historical cash forecast" for the month just completed to check your format, analysis, procedures, etc.

9. Prepare a "rolling 90-day forecast."

10. Prepare an annual forecast.

11. Test your proposed decisions by running them through your "cash forecast model" to see if the result is acceptable.

You must understand the relationships of your costs and expenses to your sales forecast. The sales forecast sets the expected level of business that you plan to conduct during your forecast period; therefore, all of your costs and expenses will be affected. Stated another way, if you do a poor or incomplete job of making your sales forecast, you will end up with a poor or incomplete cash forecast.

The end product for your sales forecast is a document that lists sales, by category, for each month of your forecast period. It is imperative that the forecast be done monthly to provide the proper foundation for your monthly cost and expense projections.