Initially, developing a cash flow analysis will take time, as you seek to identify historical trends to use in your estimates. Once you have developed this analysis, updating and maintaining it becomes easy. The good thing is that you can make the analysis as simple or complex as you want.
A cash flow analysis may be done annually, monthly, weekly, or daily, or developed for particular capital projects.
Select the cash flow analysis period that meets your needs. Only you can decide what your objectives are and how to achieve them. Certainly, an important objective is to enhance your potential investment earnings by identifying excess balances available for investment. A cash flow analysis will help give you that information.
To begin, decide which cash flow format will sufficiently meet your needs. This determination should be based on the resources available to you such as staff, time, and computer/technology, as well as the amount and timing of available excess balances.
Also keep in mind that using an automated financial system can help in monitoring your cash balances. An automated call-in system or software program will provide daily tracking of available cash balances, check clearings and collections of items deposited in checking accounts. Please contact your local bank representative to obtain information on what systems or programs are available to you.