Cash Flow Projections Example



"Cash flow Projection", Defined In Simple Terms

A Cashflow Projection is simply a reasonable estimate of money coming into your Business (Cash inflow), and money going out of your Business (Cash outflow), over a given period.
In other words, your Income and your Expenses.

An example of Cash inflow would be the Sales you make by selling your Products and Services.
An example of Cash outflow would be your Expenses, like Salaries paid to your Employees.


You need a Cashflow Projection to Open a Commercial Bank Account

A Business must have its own Bank account. You cannot deposit the money that you make from your Business into your personal Bank account; that is an illegal practice known as "commingling." 

Due to Anti Money Laundering Compliance Laws, Banks need to be aware of where the Business is getting its funding from - i.e., its source of funds; a Cashflow forecast outlines the Business' source of funds.
The Cashflow forecast also sets the Bank's expectations for planned activity on the Account.


A Proper Cashflow Lowers Your Rates

Banks analyze your Cashflow when determining your fees. When applying for loans, credit cards, or merchant services (e.g., Linx machine), Banks would analyze your Cashflow to decide whether you are applicable and what rates/fees to offer you.

A proper, professional, and well-managed Cashflow would lower your costs.


Things That Your Cashflow Must Consider

  • Trinidad & Tobago Tax Rates (if done for Opening a Business Account in T&T)
  • All your Expenses (Fuel, Rent, Inventory, etc.)
  • The Date that you're starting Operations
  • The Products/Services that you're offering
  • Your Sales forecast
  • Loans & Starting Capital
  • Employees and Salaries
  • Plans, like purchasing of equipment for the Business