Online cash-flow calculators let business owners conduct no-cost, virtual experiments with their businesses' cash flow. By changing amounts entered in fields or moving a sliding bar, business owners can see how future cash flow would be modified by actions, such as:
- having a different starting cash position,
- experiencing higher or lower sales,
- experiencing increases or reductions in cost of goods sold,
- buying or selling assets or
- obtaining a loan.
“Cash flow is obviously one of the most critical factors in running a successful practice," Serfas says. “If you don't know your number, you can't plan."
Although knowing a business's cash flow is essential, that doesn't mean figuring it out is easy for busy owners, Serfas adds. That's where online cash-flow calculators can come in.
“The owners don't have the time to sit down and go through the numbers all by themselves," Serfas says. “These calculators do a wonderful job of letting them run these numbers." (Many of his clients use free online cash-flow calculators to gain insight into their cash flow.)
Cash-flow forecasts help business owners make tactical decisions on price changes, marketing initiatives, expansions, staffing and looking for financing.
They can be important for long-term strategic planning, especially when it comes to exit strategies involving sale of the business, Serfas says. Sale prices of many types of businesses are often based on multiplying annual cash flow, he explains. That makes figuring cash flow a fundamental part of business valuation.
“When you want to get your business sold, it's an easy way to have a benchmark," Serfas says.
Caveats to Using Online Cash-Flow Calculators
While online cash-flow calculators can be handy, they have their limitations.
“People not understanding their numbers and which numbers go where is one," Serfas says.
For that reason, Serfas suggests business owners sit down with an accountant or other knowledgeable professional advisor to help them plug the right figures into the right boxes.
“The software is great, but if you don't input the data correctly, it's worthless," he says.
Another way business owners may go astray with online cash-flow calculators is by trying to take too many factors into account or being too precise with forecasts.
“People can just go down a rabbit hole and over-complicate and over-analyze the numbers," Serfas says. Realistically, cash flow forecasts are only rough projections and are almost inevitably subject to in-course corrections.
With those cautions in mind, business owners who want a better idea of where their cash is going, where it's coming from and how much they're likely to have on hand at some future date can get some help from these free online cash-flow calculators.
Palo Alto Software Cash Flow Calculator
Business plan maker Palo Alto's free online calculator is well-suited to help retail and manufacturing business owners experiment with critical factors affecting cash flow.
Users can type data into fields for starting cash, first month's sales, initial inventory balance, starting receivables and starting payables. Sliders change percentages for cost of goods sold, monthly sales growth, sales on credit and profitability, as well as figures for collection days, payment days and months of inventory kept on hand. A handy bar chart instantly displays monthly effects of changes on cash, profits and cash flow.
Clicking the “Cash Flow" tab presents a flowchart for cash received from sources such as sales and receivables, as well as vital stats for cash balance, ending payables balance, ending receivables balance and inventory.
Dinkytown Cash Flow Calculator
This free cash-flow calculator is one of many tools offered by online financial calculator site Dinkytown.net. It lets you use sliding indicators to set amounts for starting cash and receipts from customers, along with outlays for inventory, payroll, rent, insurance, advertising and interest paid.
After using those inputs to figure operating cash flow, users can include cash generated by investments and loans to arrive at a projection for cash available at the end of the month, quarter, year or other period. Adjusting the sliding indicators helps reveal the effects of obtaining a loan, increasing sales or other actions.
You can also generate and print a simple report summarizing cash available at the beginning and end of the period in question.
EquityNet Cash Flow Calculator
Crowdfunding platform EquityNet offers this cash-flow calculator for figuring ending cash-flow balances for three years.
Users can type inputs into fields for beginning cash balance and revenue along with outflows for cost of goods sold, sales and marketing, general and administrative, research and development, interest, taxes, changes in current assets and liabilities and capital expenditures.
To see the result of calculations, users must then enter contact information. Results include cash flow from operations, free cash flow and cash liquidity balance for each of the three years.
For their ease of use, ready availability and low cost, free online cash-flow calculators are hard to beat. Business owners who keep their limitations in mind may find that they provide a handy way to track, measure and forecast the all-important measure of cash.
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