Pat Raftery realized long ago the importance of tracking his cash flow. One instance of not having enough money in your bank account to pay all of your bills is enough to realize that you need to keep a handle on it. To that end — and after a bit of trial and error — Raftery, owner of Raftery & Sons Construction, in Somersworth, N.H., developed this simple Excel spreadsheet that tells him where he stands financially — if not down to the penny, then at least a comfortable ballpark number.
Raftery says this form answers the question: “If I shut my doors tomorrow, would I have enough to pay contracts, credit lines, et cetera?” So this sheet doesn't track mortgage payments or other capital expenditures that he could sell if he needed to.
Cash Flow Month Ending: July 2006 Raftery prefers to do accounting for his jobs as they go for the purposes of this sheet. Rather than track “receivables” as payments owed, he instead tallies his out-of-pocket expenses as he incurs them. When he receives a payment, he deducts that amount from his expenses. The parentheses are one way Excel indicates that a number is negative.
This is the key number; the reason that Raftery created this form. It's an easy Excel formula that subtracts the total amount owed to charge accounts ($24,005.34) from the balance shown in the middle of the page ($39,931.22).
The Excel formulas for all the bolded numbers are simple; Raftery says he's “not computer literate,” and that he wrote them using the program's “sum” function. For this one, Raftery adds the first three numbers together, then subtracts the deposits he has received, to determine his opening balance.
This form keeps a running subtotal in the far-right column. A spreadsheet with a lot of numbers can be overwhelming; by separating it this way, the information is made more manageable. This number is simply the total expenses ($25,327.00) subtracted from the starting balance of $65,258.22.