Three worked cash-flow cases sit on this page: receipts sorted by how long each payer takes, a 13-week forecast with a short gap, and three timing changes that need no borrowing. The articles each work through invented purchases for one or two trades. The optometry practice, the printer and the cleaning company are invented, and so are their numbers.
Receipts sorted by how long each payer takes: a Wayne County, MI optometry practice's cash flow forecast
A forecast for a practice that bills insurance starts from the lag: how long each payer takes between the claim and the deposit. Patients who pay at the visit put money in the bank that day; a vision plan or a medical insurer puts it there weeks later.
Illustration only, invented figures: a Wayne County, MI optometry practice bills these amounts in an ordinary month and waits these lengths of time to be paid:
| Payer | Billed a month | Days from billing to deposit | Owed to the practice at any time |
|---|---|---|---|
| Patients paying at the visit | $18,400 | 0 | - |
| Vision plan claims | $22,600 | 30 | $22,600 |
| Medical insurance claims | $14,900 | 45 | $22,350 |
Treating a month as 30 days, $44,950 is always waiting on payers in this invented case. The forecast then sets payroll, rent and the lab and frame suppliers against those deposit dates week by week, starting from today's bank balance. Claims that pay later than planned show up as a low week on paper before they show up in the account.
Thirteen weekly rows for a Wayne County, MI commercial printer waiting on a net-45 catalog job
Thirteen weekly rows are enough to follow one large job from the paper order to the customer's payment.
Illustration only, invented figures: a Wayne County, MI commercial printer starts with $16,200 in the bank and takes in about $9,800 a week from regular work. The printer's payroll, $8,600 in this invented case, leaves in odd-numbered weeks, rent of $3,900 every fourth week from week 1, and other bills run $2,150 a week. The invented catalog job needs $18,750 of paper in week 2 and $3,420 of ink and plates in week 4; it ships at the end of week 5, and net-45 terms put the customer's $52,400 in week 12.
| Week | Money in | Payroll | Rent and other bills | Catalog job costs | Ending balance |
|---|---|---|---|---|---|
| Week 1 | $9,800 | $8,600 | $6,050 | - | $11,350 |
| Week 2 | $9,800 | - | $2,150 | $18,750 | $250 |
| Week 3 | $9,800 | $8,600 | $2,150 | - | $700 short |
| Week 4 | $9,800 | - | $2,150 | $3,420 | $3,530 |
| Week 5 | $9,800 | $8,600 | $6,050 | - | $1,320 short |
| Week 6 | $9,800 | - | $2,150 | - | $6,330 |
| Week 7 | $9,800 | $8,600 | $2,150 | - | $5,380 |
| Week 8 | $9,800 | - | $2,150 | - | $13,030 |
| Week 9 | $9,800 | $8,600 | $6,050 | - | $8,180 |
| Week 10 | $9,800 | - | $2,150 | - | $15,830 |
| Week 11 | $9,800 | $8,600 | $2,150 | - | $14,880 |
| Week 12 | $62,200 | - | $2,150 | - | $74,930 |
| Week 13 | $9,800 | $8,600 | $6,050 | - | $70,080 |
The account runs short in weeks 3 and 5, by $1,320 at the worst in week 5, then recovers well before the catalog payment arrives. A gap that size and that short fits a draw on a line of credit or a small working capital loan more than any long-term debt.
Contract billing, supply orders and job deposits: three timing changes at a Livonia, MI janitorial company that need no new debt
Some cash gaps close by changing when money moves rather than by borrowing. Illustration only, invented figures, for a Livonia, MI janitorial company:
- Bill the invented $38,400 monthly contract base on the first of the month for the month ahead, on 15-day terms, instead of after the month ends on 30-day terms. In the month of the switch the company bills twice, once for the month just worked and once for the month ahead, so in this invented case it collects one extra $38,400 a single time.
- Buy cleaning supplies monthly at an invented $1,950 instead of quarterly at $5,850, which leaves $3,900 more in the account at the start of each quarter.
- Ask for a 40% deposit on one-time jobs such as a post-construction cleanup: on an invented $7,200 job, $2,880 arrives before the crew starts.
A cleaning company making these changes is one of 235 janitorial services employer establishments that County Business Patterns counted in Wayne County, MI for 2023 (NAICS 561720). If a gap remains after them, a working capital loan sized to that gap is the next step to price.
Repair bays, spa treatment rooms, machine tools and hotel laundries: what the Livonia, MI articles on this blog cover
Each article takes one or two Livonia, MI trades and works out what their invented purchases cost month by month:
- Choosing between a dealer promotion, a bank and an equipment lender for a stump grinder and a bakery oven
- A mobile service van, fluid exchange machines and a scan tool for an auto repair shop
- Indoor cycling bikes, power racks and a repair bill for a fitness studio
- Treatment beds, wax warmers and a sauna cabinet for a day spa
- Customer tooling, a wire EDM lease and welders for tool shops and plants
- Washer-extractors, dryers and front-desk computers for a hotel
Each article links the funding pages its cases use, and every figure in it is either a labeled Census count or a labeled invented example.
By Lakebridge Finance · Updated