Cash Flow Management

Establishing cash flow management system


Date: 2013 ~ 2017
Category: Business Cashflow Entrepreneurial Skill
Project Size: Solo Project, 2 weeks
My Contribution: Accounting Business Management
Tools: Google Spreadsheet


The company did not hire financial and accounting officers from 2013 until my resign in 2019. Taxes, financial statements, cash flow statements were solved using the accounting office. But for small businesses, managing cash flows was more important than financial statements and cash flow statements. The failure of cash flow management can lead to insolvency by paper profits, so the company must thoroughly manage cash flow. So from the very beginning, I created a system to manage cash flow and continued to develop according to the company's situation.


The company did not have a CFO, an accountant, or a bookkeeper. In other words, no one was mainly in charge of accounting. The company needed to manage its money flows with minimal resources.


(All data in the images below are not real data. I used dummy data created with a random function.)

I created a management system at the beginning of the company and continued to revise and develop it until it was handed over to the CEO in 2018. The focus was on current cash conditions and future cash forecasts for a smooth cash flow.

Cash Flow Management

The cash flow management table was compiled once a month. Each year, each month's revenues and expenses are organized into categories that are tailored to accounting accounts and the company's situation. When I put the raw data of the month in the sheet every month and put the category, it is automatically loaded and organized on the summary page. This single chart gives us an overview of your cash flow for a year.

1 year cash flow category table

The sum of each category of income and expenditure was also calculated and shown as a pie chart. This allowed us to see where and how spending and income came from. In addition, profit margin measurement by-product was managed using a separate Google sheet.

1 year income and expenditure pie chart

Cash Flow Forecast Management

While the company's present status was identified through the cash flow management table, the cash flow forecasting table predicted the company's future. In order to get data of the future, a prediction had to be made. This part is related to the business plan and includes forecasts. In order to increase accuracy, the part that can be automated is automated as much as possible. The parts determined by other factors such as sales tax, VAT, corporate tax, etc. based on sales are all calculated automatically by making a function. In addition, the cost was calculated automatically using the profit margin for each product. When the contract is concluded, it is reflected in the cash flow forecasting table in advance. In the early stages of the company, when there was no forecasting capability, three predictions were made. The first case was when it went as expected, the second case was when it advertised more than expected, and the last case was when it fell below expectations. In the case of better-than-expected results, we multiplied sales by 1.3 to make a forecast table. If the forecast was lower than expected, sales were multiplied by 0.5 to create a forecast table. (This part leveraged what I learned from Primer's entrepreneurship education and was a great help in doing the actual business.) This approach enabled us to preemptively respond to the coming future while providing a flexible flow of cash. Year after year, the actual data were also accumulated and the predictability was improved. Since the calculation of 1.3 and 0.5 multiples was no longer necessary, only 1 multiple was predicted.

1 year cash flow graph

As a result, the cash flow forecasting table provided a preemptive response to future cash flows six months and one year later, enabling stable company operations. In addition, by continuously writing cash flow management tables, we were able to detect and respond to changes in revenue and expenditure in each category.