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Daily Cash Flow for Business

They say that “cash is king!”, we couldn’t agree more. We have talked about how the Profit and Loss Statement shows revenue and expenses, the Balance Sheet gives the overall financial health, and the Cash Flow Statement reports the overview of the financial activity. Together, checking these three reports regularly, a business owner will be incredible. However, if we had to choose one to a business owner, we strongly recommend the Cash Flow Report, as this is the one we stress the most with our clients (and any other business). Please refer to our other blog for a deeper dive in cash flow, how to manage it in Quickbooks, tools, and why business owners need to regularly check this report.

So, just to define what the cash flow statement is real quick in a few words: it focuses on the cash that is moving in or out of the business. A company's cash flow is calculated by subtracting its total expenses from its total income for a specific period. When calculating daily cash flow needs, subtract daily expenses from daily income (check here for a more detailed explanation for the calculation).

Why Spend Time on the Daily Cash Flow Report?

If daily income is not enough to cover daily expenses, the business may have financial difficulty over time, and possibly go bankrupt. We don’t want to see any business to get this point, so to avoid this disaster, it is important to refer to check daily cash flow to make sure all operations are on track each day. If there is something that does not look right, you know it is time to make changes and where. What is so great about checking daily cash flow reports is that we can monitor every little detail with where the business’s cash is coming from and going to. Some businesses need to see this level of granularity. This report will really come in handy when business owners, CFOs, or accountants are trying to do some short-term planning work. Having access to the daily cash forecast gives a superior level of cash visibility.

Common Cash Flow Problems

Every business will come across a cash flow problem one way or another. There’s a lot of things that can go wrong with a company’s cash flow. New business owners might walk into it underestimating costs or expecting profit too quickly. Luckily, there’s a solution for most of these difficult situations.

No Cash Reserve


  • Prepare yourself for the worst case scenario, no matter how well you are doing. The economy and future is an ever changing uncertainty that is full of mysteries. Keep enough safe keeping money for short-term emergencies so the business can still continue running during challenging times.

Slow Paying Invoices


  • Small companies cannot afford to wait for payments that are taking just too long. Some may need that money sooner than later and that right there will have an impact as a cash flow problem. Slow paying invoices eventually can create a financial dilemma that will seriously affect the business.



  • Cut unnecessary expenses that may not be tied to directly selling the product or service. If there are high unreasonable debt payments, it’s time to take a second look and take care of those. The problem this leads to is cash advances. A cash advance is a form of financing which allows a business to sell a portion of its future sales in exchange for an immediate payment or high-priced loans. Best way to solve this is to refinance the loan, which replaces the loan with high payments with a new loan that has lower payments. Payments can be lowered by either extending the length of the payment terms, the interest rate, or both.

  • Bad debt occurs when a client or vendor does not pay for the goods or services that you have provided. The solution to this really isn’t hard, however what is done is done. When considering a new client, make sure to have a look out on their credit history. This is one of the factors that will determine if a client will be reliable in providing a solid payment record with the business.

Neglecting Financial Statements


  • Last but not least, of course reviewing the financial statements. Financial GPS always says, “If you don’t know your numbers, you don’t know your business”. It’s true, if you don’t spend a set time on analyzing your financial statements regularly, that’s a big problem. These reports are very helpful to avoid chaotic future business tragedies. We understand how busy a business owner is, trust us! So, with that said, at minimum try to get around to reviewing the statements once a week. Here is a playlist where our COO goes through each of the important reports every CEO should understand!

Cash Forecasting Tools and Templates

Free Forecasting Templates

We understand that not all businesses can invest in a top notch cash flow forecasting tool. So no have no fear, there are a couple of free forecasting tools you can view and download to try out!

Paid Application Tool

First up, we have Cash Analytics starting at $500 per month.

CashAnalytics guarantees to reduce cash forecasting effort by over 90%, what a strong statement! They provide the following:

  • Cash Forecast Automation: captures data directly from users source

  • Working Capital Analysis: provides several reporting tools for future reporting needs

  • In-depth Cash Flow Reporting: gives detailed perspective on upcoming information

  • Variance & Accuracy Analysis: analyze and understand everything to a unit level of data

  • Bank & Liquidity Reporting: have all total cash and liquidity balances from the business in one spot

  • System Connectivity: connects all cash flow data

You can read more about their product details here. Here is a screenshot of a Daily Cash Forecast:

Software Benefits

Obviously the free templates aren’t as sophisticated as the paid software. But if you are just starting out and now sure if your business is in the state to invest in these applications, go them out and see what they’re like!

Depending on what your business needs are, here are some considerations and ideas for what you should look for in a software to better narrow down the options.

Automated System Upload


  • Do your superiors like getting daily or weekly reports? If so, look for forecast applications that are more hands on automated to send out scheduled reporting emails.

Enhanced Analytic Insight


  • Need to put more focus on elsewhere? Upgrading and investing in a forecast tool that puts all the right numbers where they are supposed to be can be worth it so administration work can decrease in time spent.

Increased Visibility


  • Managing teams is a lot of work. Look for a forecast software that specifically aids in inspecting each department in the business. This way, you will be able to see which are in need of cash and where has too much.

Last Thoughts,

Not every business is the same, we get that. However, it does not hinder the importance of how daily cash flow reports can improve business performance. Financial GPS strongly advises to often check the Cash Flow Statement or create your own using the free templates. Your business is worth the investment!

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