Is this the way I should have my revenue goal?

[gallagher99]

Hey guys.
I'm from Brazil and here business goes a little different, for example we have more sales on credit cards and people pay in 2 or 3 parcels, for example: a product costs R$90,00 and the client pays R$30,00 monthly and I don't see the money this month
Anyway. I have a Denim/Jeans Store, for men and women. I've been doing this for the last 7 years.

Now I would like to know if I'm doing the right thing or not. I would like to know what you guys think about the way I propose my revenue goal for the month.



So this example let's stay that:
1) I have R$10.000 coming to my bank account in because I sold products on May, June and July and they are paying now (credit card). Like I said people pay A LOT in credit, and I receive in 30/60/90/120/150 days, depending in how many times they want to parcel. So R$10k coming this month TOTAL (distributed in days, for example 1st day comes R$100,00, second day R$300,00, forth day R$1.000,00, maybe nothing fitth day, etc.

2) I have for example R$40.000,00 TO PAY this month in Total. My rent, marketing, my employees, etc.

3) A little math. From my revenue:
50% comes from cash. People paying me in bills, cold hard cash.
15% comes from DEBIT card. Money comes to my account the next day.
The rest is credit card. Some they pay me in 30 days, some in 30/60 days, some in 30/60/90 days, etc.
So basically 65% of everything that I sell in August. I see THIS month, in August. The rest is September, October, etc.







So in resume:
--> $10k is coming this month
--> I have 40k to pay
--> Let's say I want $5k of profit (so I can improve my business, whatever)
--> 65% of my revenue I SEE THIS MONTH, cash in my hand/bank account.

So do I put my revenue goal to: R$55.000,00 ?
Because 65% of my revenue is R$35.750,00
With R$35.750,00 this month + R$10.000,00 in credit = R$45.750,00-
I have R$40.000,00 to pay and want R$5.000,00 of profit = R$45.000,00
So I can pay everything and leaves my with the profit I want R$5.000,00
Is this how I should put my monthly goal?


Thanks in advance guys.
Hope you guys can help me.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MidwestLandlord]

Not really sure what you are asking as this is a cash flow issue, not really revenue.

In accrual accounting you would recognize the revenue in the period that the goods or services are delivered, regardless of when it is actually paid.

For example:

August revenue: $100,000

Cash payment on that revenue: $65,000 (debit card transactions are cash)

Assume no payment from last month to keep it simple.

Total cash flow August: $65,000 (revenue is still $100,000)

Sept expected revenue: $120,000

Cash payments on that revenue: $78,000

Cash flow from August revenue: $35,000

Total cash flow Sept: $113,000 (revenue is still $120,000)

So you would expect to have $113,000 in spendable cash in September, assuming everyone actually pays.

Just adjust that for how everyone actually pays. (over the course of several months, and accounting for unpaid receivables [people that don't pay])