How to Create a Daily Cash Report

What Is a Daily Cash Report?

A daily cash report is a detailed report that outlines how much cash your business currently has on hand. It tracks how much money is coming in and out of your business, and the report is updated on a daily or weekly basis.

This report shows you how much cash you have on hand, not just today but over the next week or month. This makes it an excellent tool to help businesses with short-term financial planning, especially those with tight margins. 

A daily cash report tracks all aspects of the cash cycle, including your accounts receivables and payables. This information helps you make better financial decisions regarding your business.

How to Create a Daily Cash Report

Many people find it helpful to use a daily cash report template to get started. Once you’ve done that, here are five steps you can take to create your report. 

1. Choose your date range

The first step is to figure out how far you want to plan for and choose a date range. Do you need to know how much cash you have for the month, or are you just looking at the next week?

You can plan out as far in advance as you would like, but keep in mind your projections will be less accurate the further ahead you plan. And new businesses may need more data to create a cash report for the entire month. 

2. List your income

Next, you’ll list the income you have coming in over the coming days and weeks. This includes sales and non-sales revenue. For instance, you could include any tax refunds, grants, or investments.

Create a new column for each source of income and add them to the correct week or month. If you aren’t sure what your sales volume will be, you can use last year’s sales to make your projections.

3. List your cash outflows

Once you know how much income you can expect, you need to list any outgoing payments. Your cash outflows can include things like:

• Payroll
• Rent
• Tax bills
• Loan payments
• Materials

Once you have a list of everything going out of your account, you can add up your total. From there, you can subtract your outgoing cash from your incoming cash to see whether your cash flow is positive or negative. 

4. Adjust your plans accordingly

Hopefully, your daily cash report will show that you have a positive net cash flow and that this trend is improving over time. But what if you don’t have enough cash on hand to pay your bills?

Some people avoid looking at their finances because they’re afraid of this exact scenario occurring. But if you’re short on cash flow one week, it’s even more important to look at the numbers because this allows you to adjust your plans accordingly.

For instance, if you don’t have sufficient cash flow to make payroll, you may need to take out a loan to cover it. If this becomes an ongoing pattern, you may need to cut down on your expenses or the number of employees you have on staff.

5. Use the right tools

When you consistently create a daily cash report, you’ll start to notice trends in your business over time. You can do this with a spreadsheet, but it’s easier if you have the right tools to help you.
For instance, Lendio lets you track your expenses and view your real-time cash flow. You’ll receive alerts every time your business is approaching negative cash flow. And our in-depth reporting features will help you identify key trends in your business.

The Bottom Line

If your company consistently generates positive cash flow, this indicates that it’s in a good financial position. That’s why many investors and lenders require businesses to create a daily cash report. 

But most importantly, understanding your daily cash flow allows you to make more informed decisions about your business. If you need help creating a daily cash report, using a tool like Lendio can make this easier.