1. Identity the objective for the activity area. For our example our objective is to determine if current incoming cash is at least at last year's level, to determine if outgoing cash needs adjustment for the balance of the year.
2. If last year was not a good business year, rethink of a prior year, maybe 2013 or 2012, that was a good business year to use for the example.
3. Collect total, overall monthly incoming and outgoing cash totals from the related monthly bank statements for the calendar year selected. Enter the totals into an excel spreadsheet. You will have 12 monthly totals for incoming cash and 12 monthly totals for outgoing cash.
4. For the current year, 2015, enter into the same spreadsheet the total monthly incoming and outgoing cash for January through April.
5. Compare your 2015 incoming monthly cash totals to the prior year you selected. Is your incoming cash for the first four months of 2015 the same, lower or higher than the same period from the prior year. If incoming cash was significantly lower, can you determine why it was lower? Do you see a related decrease in outgoing cash? If you don't see a related decrease in outgoing cash, you may need to adjust your outgoing cash for the balance of the year to keep positive cash flow for year end.