BUSINESS Using Dashboard Reports “Just like your medical doctor wants to check your so-called vital signs, it’s the same idea with your business.” The Cash Section Column “G” is Cash In and will track our cash receipts — in other words, any actual cash from sales (such as over the counter or point of sale), plus any checks or even electronic deposits or transfers of cash to us, that we deposited or were credited to us that day. Cash received from customers who owe us money reduces our A/R but increases our cash. When we mark those invoices paid in our accounting soſtware, they are no longer A/R. Column “H,” or Cash Out, is just like it sounds. This tracks our payments or disbursements, which usually means checks that we’ve written to pay for goods or services that we have pur- chased or procured. Just like in A/R, when we issue a check to pay a bill/invoice from one of our suppliers (or a utility bill or other business expense), this reduces our A/P and decreases our cash because we no longer owe that money. Column “I” is Daily Net Cash and, as you might expect, is the difference between our cash that came in and our cash that went out for that day. Yes, the formula in this column calculates the difference between columns “G” and “H.” Column “J” is Cumulative Cash Balance. You will notice at the top of column “G,” there is a comment “Beginning Balance,” which points over to column “J.” When we start over with a new month, we need to carry forward the ending cash balance from the previous month. So, last month’s ending cash balance becomes this month’s beginning cash balance because this is a running total or cumulative number. This column contains a formula that simply adds the Daily Net Cash (from column “I”) to the previous day’s total Cumulative Cash Balance. This means that your Cumulative Cash Balance in column “J” will go up, down or remain unchanged, depending on what happened with your net cash each day. Column “K” is just a spacer column. Of course, if you down- load the actual spreadsheet template, or create your own, you could elect to open/widen this column and use it to track some other data or could choose to delete it. 22 KEYNOTES FEBRUARY 2021 The Finance Section Column “L” is the Daily Accounts Receivable Balance, which tracks how much you’re owed on a cumulative basis. Of necessity, this starts with a beginning balance carried forward from the previous month’s end, including any month-end adjustments to your A/R. Each time you make a sale that extends credit and you enter this transaction into your accounting system, your A/R is increased by that amount. Conversely, when you collect money owed from your invoices, you reduce your A/R because that customer no longer owes money for that invoice. This column updates each day to reflect the latest cumulative amount of your A/R. However, it does not tell us how old these invoices are, who owes the money or how many invoices are outstanding. Again, you need to run your A/R aging report from your accounting system to get that kind of detail. Column “M” is your Daily Accounts Payable Balance, which tracks how much you owe others, on a cumulative basis. Of necessity, this also starts with a beginning balance carried for- ward from the previous month’s end, including any month-end adjustments to your A/P. Each time you incur a trade debt ob- ligation (such as make a purchase on credit or receive a utility bill) and then enter this transaction into your accounting sys- tem, your A/P is increased by that amount. Conversely, when you pay bills, you reduce your A/P because you no longer owe the money for that invoice. This column updates each day to reflect the latest cumulative amount of your A/P. However, it does not tell us how old these bills are, whom you owe the money to or how many bills/invoices are outstanding. Here again, you need to run your A/P aging report from your ac- counting system for that information. Column “N” is your Daily Inventory Balance, which tells you how much money you have tied up in inventory, whether already paid for or not. The portion of your inventory that is unpaid should be reflected in your A/P under column “M” (if you’ve already been invoiced for it) because you owe that money, along with any other bills you have received but not yet paid. Remember, this does not include anything you’ve or- dered but not yet been billed for, which will appear in column “O.” Establish some parameters for the level of inventory that you can afford to have on hand (plus what’s on order) because you’ll ultimately have to burn some of your precious cash to pay for this stuff. Column “O” is your Daily Open Purchases Balance, which tells you how much you have on order that you haven’t yet been billed/invoiced for. If you have already been invoiced for an order and have entered the bill into your accounting system, then this amount should already be included in the current A/P. WWW.ALOA.ORG
