{"id":10131,"date":"2019-04-07T18:00:54","date_gmt":"2019-04-08T00:00:54","guid":{"rendered":"https:\/\/financenewmexico.org\/?p=10131"},"modified":"2019-04-08T10:22:07","modified_gmt":"2019-04-08T16:22:07","slug":"cash-flow-wesst-workshop-teaches-business-essentials","status":"publish","type":"post","link":"https:\/\/financenewmexico.org\/sandbox\/articles\/general-business-advice\/cash-flow-wesst-workshop-teaches-business-essentials\/","title":{"rendered":"Cash Flow: WESST Workshop Teaches Business Essentials"},"content":{"rendered":"
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Julianna Silva is Managing Director of the WESST Enterprise Center. Article by Sandy Nelson.<\/p><\/div>\n

Keeping track of the money flowing in and out of a business is challenging even in the best of times \u2014 when cash is flooding in and the outflow is a comparative trickle. But any business that wants to stay in business needs to master cash flow management.<\/p>\n

To help small-business owners get a handle on this essential skill, WESST in Albuquerque is conducting a workshop, \u201cLearn the Language of Your Business Finances,\u201d that includes demonstrations of how businesses can manage their finances, including cash flow, by having participants work with a spreadsheet for a fictitious venture.<\/p>\n

The exercise gives tangible examples of the costs that businesses can expect to pay \u2014advertising, supplies, raw materials, loan payments, payroll, rent, insurance premiums, and so on \u2014 and the revenue they can anticipate for a given period. The hypothetical example shows trouble looming as bills come due and the revenue falls short of what\u2019s needed to meet obligations.<\/p>\n

\u201cOnce we complete the exercise of filling in all of the data in the cash flow projection, we start getting the participants to make some management decisions to avoid the negative cash flow that results,\u201d said Julianna Silva, managing director of the WESST Enterprise Center.<\/p>\n

A statement of cash flows shows the net change in cash that results from a company\u2019s operating, investing and financing activities during the period being measured. But many business owners, especially inexperienced ones, manage their finances by monitoring only the profit and loss or income statement and the balance sheet.<\/p>\n

These are good practices, but they don\u2019t give the complete picture of the business\u2019s health and don\u2019t help the business anticipate cash shortfalls.<\/p>\n

\u201cWe find an incredibly helpful tool that pulls information together from both the profit and loss and balance sheet is a cash flow projection or cash flow budget,\u201d Silva said. \u201cThis pulls all cash events \u2014 money coming in and money going out \u2014 and records them in the month they occur. It\u2019s created in a spreadsheet application and projects 12 months of beginning and ending cash for each month.\u201d<\/p>\n

Because only cash movements are recorded, credit card purchases wouldn\u2019t register on the cash flow projection, but credit card payments would, she said. This is why the cash flow projection should be reviewed alongside the profit and loss and balance sheet summaries.<\/p>\n

The three-part workshop meets from 5:30 to 7:30 p.m. Tuesdays beginning April 23. The session on cash flow is the third in the series.<\/p>\n

Session one tackles the break-even analysis, which helps companies project minimum sales to cover fixed and variable expenses and can inform their pricing strategies. The second session is an introduction to financial statements \u2014 how they\u2019re created and what the numbers and ratios mean to the business and to lenders. Session three shows how a cash flow projection can reveal why a business might have little cash on hand even though their income statement shows a profit.<\/p>\n

The workshop series costs $75, though scholarships are available by calling Lorena Schott at 505-246-6939. Register here<\/a> by April 22.<\/p>\n

Finance New Mexico article 601 by Sandy Nelson.<\/em><\/p>\n

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Keeping track of the money flowing in and out of a business is challenging even in the best of times \u2014 when cash is flooding in and the outflow is a comparative trickle. But any business that wants to stay … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[59,300,128,41],"_links":{"self":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/10131"}],"collection":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/comments?post=10131"}],"version-history":[{"count":1,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/10131\/revisions"}],"predecessor-version":[{"id":10132,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/10131\/revisions\/10132"}],"wp:attachment":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/media?parent=10131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/categories?post=10131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/tags?post=10131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}