Challenge: build a simple cash flow spreadsheet
In seven days you end up with a working spreadsheet of inflows and outflows.
Cash flow is the movement of money coming in and going out over a period. Knowing it, day after day, explains why a business with sales can run out of money. This challenge guides you, in one week, through building a simple spreadsheet and reading it for the first time.
Goal
At the end of seven days, have a working spreadsheet with inflows, outflows and balance, and a first picture of how money moves.
Materials and time
- A spreadsheet program, such as the one you already have on your computer or phone.
- Statements, receipts and proofs for the last 30 days.
- 20 to 40 minutes a day.
Steps by day
- Day 1 - Columns. Create the columns: date, description, category, inflow, outflow and balance.
- Day 2 - Categories. Define a few categories for inflows (sales, other) and outflows (suppliers, rent, taxes, staff, other).
- Day 3 - Inflows. Enter the inflows of the last 30 days.
- Day 4 - Outflows. Enter the outflows of the same period.
- Day 5 - Balance. Add the running balance formula and check it against the real account balance.
- Day 6 - Summary. Create a table with the total per category and the balance per week.
- Day 7 - Reading. Observe in which weeks the balance was lowest and why.
Log
At the end of each day, note what you completed, what was hard and how long it took. On the last day, write the three most important observations the spreadsheet showed.
Final reflection
Many people discover that money was tight in specific weeks because of when bills fall due and sales are received, not because of a lack of sales. With that, it is possible to rearrange deadlines, negotiate due dates and build a reserve. From now on, update the spreadsheet once a week.
