I have noticed recently with my clients that one of the impacts from the pandemic is a significant decline in working capital and an increase in debt. For some of my clients, this is the most debt that they have ever had on their books!

With such uncertainty around Cash On Hand (COH), a short-term cash forecast is vital to planning. Here’s a link to one of the tools I recently created. This particular tool was built in Tableau. The below screenshot gives you an idea of how the dashboard is organized. The chart across the top projects ending cash balances until the end of 2021 using a few basic assumptions (which are tucked away nicely in the menu at the top left). The green shading indicates a cash positive situation while the red alerts the user to a cash deficit.

The lower section of the page provides answers there critical questions:

  1. How much cash did the company add (or spend) to its bank accounts? A negative amount indicates the company is spending more than it’s bringing in for the month.
  2. How many months of cash are on hand? The COH row uses the assumptions entered within the menu to calculate how many months of cash remain on hand. If the company has less than 3 months, then it might be time to draw funds from a debt vehicle such as a line of credit.
  3. How many months of cash are on hand if funds are pulled from other sources (such as the line of credit)? By modifying the assumption in the menu, the number of months of COH calculation updates so different line of credit draw scenarios can be quickly tested.

If you are struggling to manage cash flow and make decisions about finances, please reach out to me at keri@kerijamescpa.com. I work with Tableau daily along with other tools designed specifically for cash flow forecasting like Float. I’d be delighted to help you start using your financial data to improve your decision-making!

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