Black Ink Cashflow Secrets Your Accountant Never Shared

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Tom Shay's presentation on how to accurately predict the cash position of a business for a 12 month time period. www.profitsplus.org

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Black Ink Cashflow Secrets Your Accountant Never Shared

  1. 1. www.profitsplus.org Presented by Tom Shay of Profits Plus Solutions 727-464-2182 tomshay@profitsplus.org
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  5. 5. We are not: Eliminating your accountant. Learning a new way of accounting. We are: Developing a great management tool. Planning for a great future. www.profitsplus.org
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  8. 8. Income Statement Cash Sales 62,000 Cost of Goods Sold 39,370 Gross Profit 22,630 Gross Profit Percentage 36.5% Operating Expenses: Wages 12,000 Payroll Taxes 960 Property Taxes - Rent 8,000 Telephone & Utilities 2,400 Repairs 150 Advertising 1,575 Accounting & Legal 200 Automobile 140 Bank Charges 210 Computer Operations 175 Dues & Subscriptions 300 Insurance - General & Workman's Compensation 800 Licenses & Taxes (not sales tax) 100 Office & Store Supplies 300 Outside Services 250 Travel 1,000 Total Operating Expenses 28,560 Operating Income (5,930) Other Income and Expenses: Miscellaneous Income - Interest Income 265 Interest Expense - Net Income Before Taxes (5,665) Federal Income Tax - Net Income (Loss) (5,665)www.profitsplus.org
  9. 9. Month YTD Month last year YTD last year Budget Variance Sales 100% 100% 100% 100% COGS Gross profit % % % % Operating expenses Advertising expense Advertising E-Newsletter Website Advertising subtotal % % % % Occupancy expense Building repairs Maintenance Rent Utilities and telephone Occupancy subtotal % % % % Payroll expense Benefits Owner draw Payroll taxes Wages and salaries Workman's Comp and Health Insurance Payroll subtotal % % % % Accounting Balancing account Bank and merchant service fees Depreciation Dues and subscriptions Freight Business Insurance Legal Loss Meals and entertainment Miscellaneous Office expense Office supplies Merchandising Printing Postage and shipping Returned checks Software support Business & Personal Property Taxes Travel Total operating expenses % % % % Net income % % % % 10
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  40. 40. A B C D E 1 EZ Cashflow (TM) Cash Basis 2 3 For Month Ending: 1/31 2/28 3/31 4 5 Income Statement 6 Cash Sales P 62,000 65,000 70,000 7 Cost of Goods Sold C 39,370 41,275 44,450 8 Gross Profit C 22,630 23,725 25,550 9 Gross Profit Percentage P 36.5% 36.5% 36.5% 10 11 Operating Expenses: 12 Wages P 11,000 17,500 12,000 13 Payroll Taxes C 880 1,400 960 14 Property Taxes P - - - 15 Rent P 8,000 8,000 2,000 16 Telephone & Utilities P 2,400 2,400 2,200 17 Repairs P 150 150 150 18 Advertising P 1,575 1,600 1,700 19 Accounting & Legal P 200 200 200 20 Automobile P 140 140 140 21 Bank Charges P 210 210 210 22 Computer Operations P 175 175 175 23 Dues & Subscriptions P 300 - - 24 Insurance - General & Workman's Compensation P 800 800 800 25 Licenses & Taxes (not sales tax) P 100 - - 26 Office & Store Supplies P 300 300 300 27 Outside Services P 250 250 250 28 Travel P 1,000 - - 29 30 Total Operating Expenses C 27,480 33,125 21,085 31 32 Operating Income C (4,850) (9,400) 4,465 33 34 Other Income and Expenses: 35 Miscellaneous Income P - - - 36 Interest Income P 265 - - 37 Interest Expense P - - - 38 39 Net Income Before Taxes C (4,585) (9,400) 4,465 40 41 Federal Income Tax P - - - 42 43 Net Income (Loss) C (4,585) (9,400) 4,465
  41. 41. A B C D E 1 EZ Cashflow (TM) Cash Basis 2 3 For Month Ending: 1/31 2/28 3/31 46 Cash Balance, Beginning of Month P/C 17,500 9,445 (14,627) 47 48 Net income (Loss) C (4,585) (9,400) 4,465 49 50 Add: 51 Cost of Goods Sold C 39,370 41,275 44,450 52 53 Less: 54 Inventory Purchases of Previous Month P 42,000 54,850 47,500 55 Freight In of Previous Month C 840 1,097 950 56 Principal Payments on Loans P - - - 57 58 Cash Balance, End of Month C 9,445 (14,627) (14,162) www.profitsplus.org
  42. 42. A B C D E 1 EZ Cashflow (TM) Cash Basis 2 3 For Month Ending: 1/31 2/28 3/31 4 5 Income Statement 6 Cash Sales P 62,000 65,000 70,000 7 Cost of Goods Sold C 39,370 41,275 44,450 8 Gross Profit C 22,630 23,725 25,550 9 Gross Profit Percentage P 36.5% 36.5% 36.5% 1 0 1 1 Operating Expenses: 1 2 Wages P 11,000 17,500 12,000 1 3 Payroll Taxes C 880 1,400 960 1 4 Property Taxes P - - - 1 5 Rent P 8,000 8,000 2,000 1 6 Telephone & Utilities P 2,400 2,400 2,200 1 7 Repairs P 150 150 150 1 8 Advertising P 1,575 1,600 1,700 1 9 Accounting & Legal P 200 200 200 2 0 Automobile P 140 140 140 2 1 Bank Charges P 210 210 210 2 2 Computer Operations P 175 175 175 2 3 Dues & Subscriptions P 300 - - 2 4 Insurance - General & Workman's Compensation P 800 800 800 2 5 Licenses & Taxes (not sales tax) P 100 - - 2 6 Office & Store Supplies P 300 300 300 2 7 Outside Services P 250 250 250 2 8 Travel P 1,000 - - 2 9 3 0 Total Operating Expenses C 27,480 33,125 21,085 3 1 3 2 Operating Income C (4,850) (9,400) 4,465 3 3 3 4 Other Income and Expenses: 3 5 Miscellaneous Income P - - - 3 6 Interest Income P 265 - - 3 7 Interest Expense P - - - 3 8 3 9 Net Income Before Taxes C (4,585) (9,400) 4,465 4 0 4 1 Federal Income Tax P - - - 4 2 4 3 Net Income (Loss) C (4,585) (9,400) 4,465 Column B: C & P www.profitsplus.org
  43. 43. Column B: P/C A B C D E 1 EZ Cashflow (TM) Cash Basis 2 3 For Month Ending: 1/31 2/28 3/31 46 Cash Balance, Beginning of Month P/C 17,500 9,445 (14,627) 47 48 Net income (Loss) C (4,585) (9,400) 4,465 49 50 Add: 51 Cost of Goods Sold C 39,370 41,275 44,450 52 53 Less: 54 Inventory Purchases of Previous Month P 42,000 54,850 47,500 55 Freight In of Previous Month C 840 1,097 950 56 Principal Payments on Loans P - - - 57 58 Cash Balance, End of Month C 9,445 (14,627) (14,162) www.profitsplus.org
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  46. 46. EZ Cashflow (TM) Cash Basis For Month Ending: 1/31 Income Statement Cash Sales P 62,000 Cost of Goods Sold C 39,370 Gross Profit C 22,630 Gross Profit Percentage P 36.5% Operating Expenses: Wages P 11,000 Payroll Taxes C 880 Property Taxes P - Rent P 8,000 Telephone & Utilities P 2,400 Repairs P 150 Advertising P 1,575 Accounting & Legal P 200 Automobile P 140 Bank Charges P 210 Computer Operations P 175 Dues & Subscriptions P 300 Insurance - General & Workman's Compensation P 800 Licenses & Taxes (not sales tax) P 100 Office & Store Supplies P 300 Outside Services P 250 Travel P 1,000 Total Operating Expenses C 27,480 Operating Income C (4,850) Other Income and Expenses: Miscellaneous Income P - Interest Income P 265 Interest Expense P - Net Income Before Taxes C (4,585) Federal Income Tax P - Net Income (Loss) C (4,585) Original Margin www.profitsplus.org
  47. 47. EZ Cashflow (TM) Cash Basis For Month Ending: 1/31 Income Statement Cash Sales P 62,000 Cost of Goods Sold C 39,184 Gross Profit C 22,816 Gross Profit Percentage P 36.8% Operating Expenses: Wages P 11,000 Payroll Taxes C 880 Property Taxes P - Rent P 8,000 Telephone & Utilities P 2,400 Repairs P 150 Advertising P 1,575 Accounting & Legal P 200 Automobile P 140 Bank Charges P 210 Computer Operations P 175 Dues & Subscriptions P 300 Insurance - General & Workman's Compensation P 800 Licenses & Taxes (not sales tax) P 100 Office & Store Supplies P 300 Outside Services P 250 Travel P 1,000 Total Operating Expenses C 27,480 Operating Income C (4,664) Other Income and Expenses: Miscellaneous Income P - Interest Income P 265 Interest Expense P - Net Income Before Taxes C (4,399) Federal Income Tax P - Net Income (Loss) C (4,399) With Increased Margin www.profitsplus.org
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  49. 49. For Month Ending: Totals Budget Income Statement Cash Sales 863,000 Cost of Goods Sold 548,005 Gross Profit 314,995 Gross Profit Percentage 36.5% Operating Expenses: Wages 159,200 Payroll Taxes 12,736 Property Taxes 10,500 Rent 36,000 Telephone & Utilities 25,600 Repairs 1,800 Advertising 20,875 Accounting & Legal 2,400 Automobile 1,680 Bank Charges 2,520 Computer Operations 2,100 Dues & Subscriptions 525 Insurance - General & Workman's Compensation 10,500 Licenses & Taxes (not sales tax) 1,850 Office & Store Supplies 3,600 Outside Services 3,000 Travel 3,050 Total Operating Expenses 297,936 Operating Income 17,059 Other Income and Expenses: Miscellaneous Income 14,400 Interest Income 265 Interest Expense - Net Income Before Taxes 31,724 Federal Income Tax 4,200 Net Income (Loss) 27,524 3.189% Plus $1200 3.330% 14.5 days Dollars or Days – Profit www.profitsplus.org
  50. 50. Accrual method www.profitsplus.org
  51. 51. A B C D E 1 EZ Cashflow (TM) Accrual Basis 2 3 For Month Ending: 1/31 2/28 3/31 4 Income Statement 5 6 Gross Sales P 62,000 65,000 70,000 7 Cost of Goods Sold C 39,370 41,275 44,450 8 Gross Profit C 22,630 23,725 25,550 9 Gross Profit Percentage P 36.5% 36.5% 36.5% 10 11 Operating Expenses: 12 Wages (Including accrued) P 12,000 12,500 13,000 13 Payroll Taxes C 960 1,000 1,040 14 Property Taxes (Accrued) P 875 875 875 15 Rent (Including accrued) P 3,000 3,000 3,000 16 Telephone & Utilities P 2,400 2,400 2,200 17 Repairs P 150 150 150 18 Advertising P 1,575 1,600 1,700 19 Accounting & Legal P 200 200 200 20 Automobile P 140 140 140 21 Accounts Receivable Written Off P 250 - - 22 Bank Charges P 210 210 210 23 Computer Operations P 175 175 175 24 Depreciation (Accrued) P 300 300 300 25 Dues & Subscriptions P 300 - - 26 Insurance - General & Workman's Compensation P 800 800 800 27 Licenses & Taxes (not sales tax) P 100 - - 28 Office & Store Supplies P 300 300 300 29 Outside Services P 250 250 250 30 Travel P 1,000 - - 31 32 Total Operating Expenses C 24,985 23,900 24,340 33 34 Operating Income C (2,355) (175) 1,210 35 36 Other Income and Expenses: 37 Accrued Income P 1,200 1,200 1,200 38 Interest Income P 265 - - 39 Interest Expense P - - - 40 41 Net Income Before Taxes C (890) 1,025 2,410 42 43 Federal Income Tax (Accrued) P 350 350 350 44 45 Net Income (Loss) C (1,240) 675 2,060 www.profitsplus.org
  52. 52. 77 Freight In C 1,097 950 840 78 Inventory Purchases, Delayed Payment C - 3,000 8,400 79 Wages P - 6,480 - 80 Property Taxes P - - - 81 Rent P 6,000 6,000 - 82 Federal Income Tax P - - - 83 84 Non-Operations Related Cash Receipts(Payments): 85 Sale of Equipment P - - - 86 Purchase of Equipment P - - - 87 Loan Principal Payments P - - - 88 Cash Infusion from Loan P - - - 89 90 Net Cash Increase(Decrease) C (18,462) (15,795) (1,975) 91 92 Cash Balance, End of Month C (962) (16,757) (18,732) 93 A B C D E 1 EZ Cashflow (TM) Accrual Basis 2 3 For Month Ending: 1/31 2/28 3/31 94 Balance Sheet 95 96 Accounts Receivable, Beginning P/C 14,000 26,150 27,370 97 Add: Credit Sales C 12,400 13,000 14,000 98 Less: Collections C - 11,780 12,350 99 Less: Write Offs C 250 - - 100 Accounts Receivable, Ending C 26,150 27,370 29,020 101 102 Inventory, Beginning P/C 300,000 316,577 323,752 103 Purchases, Cash P 40,000 42,500 40,000 104 Purchases, 30 Days P 3,000 5,000 2,000 105 Purchases, 60 Days P 3,400 - - 106 Purchases, 90 Days P 8,450 - - 107 Purchases, Total C 54,850 47,500 42,000 108 Freight In C 1,097 950 840 109 Cost of Goods Available for Sale C 355,947 365,027 366,592 110 Cost of Goods Sold C 39,370 41,275 44,450 111 Inventory, Ending C 316,577 323,752 322,142 112 113 Inventory Payable, Beginning P/C - 14,850 16,850 114 Purchases, 30 Days C 3,000 5,000 2,000 115 Purchases, 60 Days C 3,400 - - 116 Purchases, 90 Days C 8,450 - - 117 Purchases on Credit, Total C 14,850 5,000 2,000 118 Payments, 30 Days C - (3,000) (5,000) 119 Payments, 60 Days C - - (3,400) 120 Payments, 90 Days C - - - 121 Payments, Total C - (3,000) (8,400) 122 Inventory Payable, Ending C 14,850 16,850 10,450 www.profitsplus.org
  53. 53. A B C D E 1 EZ Cashflow (TM) Accrual Basis 2 3 For Month Ending: 1/31 2/28 3/31 94 Balance Sheet 95 96 Accounts Receivable, Beginning P/C 14,000 26,150 27,370 97 Add: Credit Sales C 12,400 13,000 14,000 98 Less: Collections C - 11,780 12,350 99 Less: Write Offs C 250 - - 100 Accounts Receivable, Ending C 26,150 27,370 29,020 101 102 Inventory, Beginning P/C 300,000 316,577 323,752 103 Purchases, Cash P 40,000 42,500 40,000 104 Purchases, 30 Days P 3,000 5,000 2,000 105 Purchases, 60 Days P 3,400 - - 106 Purchases, 90 Days P 8,450 - - 107 Purchases, Total C 54,850 47,500 42,000 108 Freight In C 1,097 950 840 109 Cost of Goods Available for Sale C 355,947 365,027 366,592 110 Cost of Goods Sold C 39,370 41,275 44,450 111 Inventory, Ending C 316,577 323,752 322,142 112 113 Inventory Payable, Beginning P/C - 14,850 16,850 114 Purchases, 30 Days C 3,000 5,000 2,000 115 Purchases, 60 Days C 3,400 - - 116 Purchases, 90 Days C 8,450 - - 117 Purchases on Credit, Total C 14,850 5,000 2,000 118 Payments, 30 Days C - (3,000) (5,000) 119 Payments, 60 Days C - - (3,400) 120 Payments, 90 Days C - - - 121 Payments, Total C - (3,000) (8,400) 122 Inventory Payable, Ending C 14,850 16,850 10,450
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