A worked 13-week cash forecast for a Codington County, SD millwork shop, six cash flow levers for the same shop, a forecast built around insurance claim lag at a dental office and a paper goods order at a sit-down restaurant.
Thirteen weeks of cash at a Codington County, SD millwork shop, laid out week by week
Illustration only, invented figures: a millwork shop opens the quarter with $24,350 in the bank, pays $11,630 of payroll every other week, buys hardwood and sheet goods against two large builder orders and carries a steady weekly bill for rent, utilities and consumables. Each row adds the week's receipts and subtracts what goes out:
| Week | Customer receipts | Payroll | Hardwood and sheet goods | Other costs | Ending cash |
|---|---|---|---|---|---|
| Week 1 | $6,230 | $11,630 | - | $2,985 | $15,965 |
| Week 2 | $4,870 | - | $19,385 | $2,985 | -$1,535 |
| Week 3 | $9,415 | $11,630 | - | $2,985 | -$6,735 |
| Week 4 | $3,725 | - | $2,435 | $2,985 | -$8,430 |
| Week 5 | $12,940 | $11,630 | - | $2,985 | -$10,105 |
| Week 6 | $21,485 | - | - | $2,985 | $8,395 |
| Week 7 | $8,315 | $11,630 | $16,855 | $2,985 | -$14,760 |
| Week 8 | $17,630 | - | - | $2,985 | -$115 |
| Week 9 | $10,265 | $11,630 | $1,915 | $2,985 | -$6,380 |
| Week 10 | $14,935 | - | - | $2,985 | $5,570 |
| Week 11 | $9,830 | $11,630 | - | $2,985 | $785 |
| Week 12 | $18,745 | - | $2,665 | $2,985 | $13,880 |
| Week 13 | $13,370 | $11,630 | - | $2,985 | $12,635 |
The invented forecast dips below zero in weeks 2, 3, 4, 5, 7, 8 and 9, and its low point is week 7, at -$14,760. The invented receipts for the quarter total $151,755, and the invented closing balance is $12,635, so the shop is not short of business; it is short of timing.
An invented credit line draw of $15,500 in week 2 would keep the account above zero with $740 to spare at the low point, and the invented receipts of weeks 10 to 12 could repay it before interest. That is the question a forecast answers before a call: how much, for how long.
Six ways a Codington County, SD millwork shop can move its cash earlier
The forecast above points to its own fixes. Each one moves money earlier or spending later without changing what the shop builds:
- Ask for a deposit on custom orders, so the hardwood for a job is partly paid before it is cut.
- Bill large stair and trim packages in stages tied to deliveries instead of one invoice at the end.
- Invoice each order on the day it is delivered, not at month end.
- Order hardwood against signed purchase orders rather than expected ones.
- Match each machine payment to the machine's working life, so a five-year moulder is not paid off in one.
- Keep the credit line for wood and wages, and leave machines to equipment financing.
A repair bill is a cost a forecast can miss; a line kept clear of machine purchases has room for one.
How to prepare a cash flow forecast: a worked case on insurance claim lag at a Codington County, SD dental office
A dental office bills insurers after each visit and waits for the claims to pay. The forecast has to follow the payment, not the visit:
- List each week's expected visits and the billed amount, split between insurers and patients.
- Shift the insurer share by the invented average wait: in this invented case, $17,930 of claims billed in week 1 is paid 37 days later, in week 6.
- Enter patient payments in the week of the visit, and payment-plan amounts in the weeks they are due.
- Add payroll on its own dates, lab bills when the lab invoices, and supplies when they are ordered.
- Run the balance week by week and mark every week it falls under the cushion the office wants to keep.
- Size any request to the deepest such week, and check that later claim payments can repay it.
In the invented case, the first five weeks carry full payroll with almost no insurer money coming in, which is why an office adding a hygienist feels the 37-day invented wait well before the new visits pay.
Paper goods and food stock at a Watertown, SD sit-down restaurant: planning the order
Illustration only, invented figures: a sit-down restaurant spends $2,585 on to-go containers, napkins, cups and guest checks every 3 weeks, on top of its food orders. Its distributor bills on delivery, while card deposits from the dining room reach the bank a day or two after each shift.
A small, repeating order like this one can simply be paid from the deposits themselves. When a menu change or a large party booking calls for a bigger food and paper order at once, a credit line draw repaid from the next weeks of card deposits fits the size and the timing. A merchant cash advance is a separate route for a card-heavy dining room; it is not a loan, and its cost is set by a factor rather than a rate.
Longer Watertown, SD posts on stock, machines, lifts, ovens, term lengths and leases
Each of these posts takes one decision and prices it with invented figures:
- Stocking a building supply store: a truckload of insulation on two inventory terms, a supplier statement on a credit line and floor-standing racks.
- Fabrication shop machinery: a fiber laser on two quotes, a used turret punch and steel plate for an order paid after delivery.
- Lifts, diagnostic tools and parts stock for an auto repair shop.
- Supper club and cafe funding: an oven, a proofer, a beef order and a card-sales advance.
- How long business term loans run, with one loan at three terms.
- Leasing or buying shop equipment: a beam drill line, rental-floor sanders and lease-end buyouts.
By Whitespring Funding Group · Updated