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Simple Startup Cashflow Projections

docs.sendwithses.com

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Re: Simple Startup Cashflow Projections

#11

Post by keerthiko »

tedsanders wrote: post #7

FYI, this spreadsheet does not use words like income, profit, loss, expenditure, etc. in the same way that businesses and accountants use the terms. Be very careful if you're communicating these numbers to other parties - they may not interpret the words in the same way you intend them. Example: Cash flow is not the same as profits/losses. If you buy a $1M CNC machine for $1M in cash, your profit is $0 but your cashf…

In many years of having had accounting terms explained to me and glossaries listed, I have never seen such clean, concise and effective examples and explanations of the differences between oft-confused terms. Do you have a cheat-sheet glossary of (official) accounting terms in your own words somewhere?

Re: Simple Startup Cashflow Projections

#12

Post by hencq »

lubos wrote: post #10
airstrike wrote: post #8

Earlier quoted context omitted.

> FYI, this spreadsheet does not use words like income, profit, loss, expenditure, etc. in the same way that businesses and accountants use the terms. That's a very polite and roundabout way to say the spreadsheet is wrong...

The spreadsheet is not wrong. It's just named incorrectly. It should be called "Income Statement Generator" because that's exactly what it is.

It's not though. For example, the hardware/software purchases in month 1 are an expenditure, but would likely be a depreciation expense over a period of time.

Re: Simple Startup Cashflow Projections

#13

Post by formercoder »

tedsanders wrote: post #7

FYI, this spreadsheet does not use words like income, profit, loss, expenditure, etc. in the same way that businesses and accountants use the terms. Be very careful if you're communicating these numbers to other parties - they may not interpret the words in the same way you intend them. Example: Cash flow is not the same as profits/losses. If you buy a $1M CNC machine for $1M in cash, your profit is $0 but your cashf…

And in reverse, all of those juicy options you pay your staff with should be income statement expenses, and then reversed as non cash on the cash flow statement.

Re: Simple Startup Cashflow Projections

#14

Post by tedsanders »

keerthiko wrote: post #11
tedsanders wrote: post #7

FYI, this spreadsheet does not use words like income, profit, loss, expenditure, etc. in the same way that businesses and accountants use the terms. Be very careful if you're communicating these numbers to other parties - they may not interpret the words in the same way you intend them. Example: Cash flow is not the same as profits/losses. If you buy a $1M CNC machine for $1M in cash, your profit is $0 but your cashf…

In many years of having had accounting terms explained to me and glossaries listed, I have never seen such clean, concise and effective examples and explanations of the differences between oft-confused terms. Do you have a cheat-sheet glossary of (official) accounting terms in your own words somewhere?

I used to work as a management consultant for senior executives of tech companies. I learned the essentials of accounting by going through this workbook on a five-hour flight: https://www.amazon.com/gp/product/0132744376/ref=ppx_yo_dt_b...

It's filled with simple fill-in-the-blank examples, but the repetition really helped it stick.

Re: Simple Startup Cashflow Projections

#15

Post by lubos »

hencq wrote: post #12
lubos wrote: post #10

Earlier quoted context omitted.

The spreadsheet is not wrong. It's just named incorrectly. It should be called "Income Statement Generator" because that's exactly what it is.

It's not though. For example, the hardware/software purchases in month 1 are an expenditure, but would likely be a depreciation expense over a period of time.

Can you give an example? In Australia, you'd need to buy hardware or software for more than $30,000 per unit to be forced to depreciate it over multiple periods. Anything cheaper than $30,000 can be expensed right away. So I'm looking at it through Australian optics and having "Hardware/software" under expenses would be fine for almost every small business here.

Re: Simple Startup Cashflow Projections

#16

Post by BayezLyfe »

ynac wrote: post #4

Agreed! I swear by this type of cash-flow-pro-forma. It becomes a model for the business that you can share with anyone involved in the business (or would like to be involved). In some ways it becomes my simulation engine for the business. There are ways to alter the basic sheet for different purposes, but here are my basic add-ons or differences from the sendwithses.com version. My sheet has: * Metrics section at th…

Would love to see your version... do you mind sharing?

Re: Simple Startup Cashflow Projections

#17

Post by hencq »

lubos wrote: post #15
hencq wrote: post #12

Earlier quoted context omitted.

It's not though. For example, the hardware/software purchases in month 1 are an expenditure, but would likely be a depreciation expense over a period of time.

Can you give an example? In Australia, you'd need to buy hardware or software for more than $30,000 per unit to be forced to depreciate it over multiple periods. Anything cheaper than $30,000 can be expensed right away. So I'm looking at it through Australian optics and having "Hardware/software" under expenses would be fine for almost every small business here.

Yeah, I guess you're right. It's just confusing to see them call the spreadsheet "Cashflow projections" and then use the words 'expenses' and 'profit/loss'. But then again, they also use 'expenditures', so who knows what they're going for. In their example spreadsheet (and to your point) I guess all the expenditures could correspond 1:1 with expenses, so in this case cashflow == profit maybe.

Re: Simple Startup Cashflow Projections

#18

Post by mdorazio »

hencq wrote: post #12
lubos wrote: post #10

Earlier quoted context omitted.

The spreadsheet is not wrong. It's just named incorrectly. It should be called "Income Statement Generator" because that's exactly what it is.

It's not though. For example, the hardware/software purchases in month 1 are an expenditure, but would likely be a depreciation expense over a period of time.

Generally in the US, if an individual unit costs under around $5k it's easier to just count it as a one-time expense instead of dealing with a depreciation schedule.

Re: Simple Startup Cashflow Projections

#20

Post by samdung »

tedsanders wrote: post #7

FYI, this spreadsheet does not use words like income, profit, loss, expenditure, etc. in the same way that businesses and accountants use the terms. Be very careful if you're communicating these numbers to other parties - they may not interpret the words in the same way you intend them. Example: Cash flow is not the same as profits/losses. If you buy a $1M CNC machine for $1M in cash, your profit is $0 but your cashf…

I think you are confusing cash-based accounting (which this spreadsheet is about) from accrual-based accounting (which is what you have described).
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