Documenting your Cash Flow Budget
Most spreadsheet-based cash flow budgets have a line for the income or expense item and
a column for the month. Consequently it may be difficult for someone else (such as a
lender) to follow your cash flow budget if you don’t have some sort of other
documentation.
The cost of production templates work well for making an enterprise budget. You may
also want to write a companion spreadsheet that records the major sales and expenses by
month. Crop producers, for instance should indicate the yield, sale price and sale month
for each crop.
It is possible to document some of your figures within the cash flow budget spreadsheet
itself, if you use formulas rather than using a calculator to figure you budget numbers.
For instance, if a livestock sales cell displayed 24,500 but contained the formula
=40*625*.98 when you clicked on the cell, you would be able to see that you were
talking about 40 head weighing 625 and selling for $ .98 per pound. Keep in mind,
however, that your lender will not be able to edit the contents of the cell. You should
have another way for others to see what assumptions you make as you put together the
cash flow budget. Make your projections as explicit as possible in order to foster better
communication between you and the others who will read your budget.
