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Cash Flow Tracking

1. Cash vs. Profit​

We manage by Cash Flow, not just Accounting Profit. A profitable business can die if it runs out of cash.

2. The 13-Week Cash Flow Forecast​

We maintain a rolling spreadsheet that predicts cash position for the next quarter.

  • Inflows (Optimistic): Confirmed Recurring Revenue.
  • Inflows (Conservative): 50% of "Likely" Pipeline deals.
  • Outflows (Fixed): Rent, Salaries, Software.
  • Outflows (Variable): Ad spend, Contractor fees.

Rule: If the Forecast shows < 30 days cash buffer in any week, Spending Freeze is triggered immediately.

3. Bank Account Structure (Profit First Inspired)​

To manage cash physically, we use multiple accounts (or "Pockets"):

  1. Income (Receive-Only): All revenue lands here.
  2. OpEx (Checking): For paying bills and salaries.
  3. Tax (Savings): 15% of revenue transferred here weekly. Do not touch.
  4. Profit/Reserve (Savings): 5-10% transferred here. Do not touch.

4. The Weekly Allocation Routine​

Every Thursday:

  1. Check total balance in "Income."
  2. Move 15% to "Tax."
  3. Move 10% to "Profit."
  4. Move remainder to "OpEx."
  5. Pay bills from "OpEx."

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