Industry sector: Retail and wholesale

Office goods supplier: Cash sales


'Cash sales' means any income from your main business activity which is received at the time of sale. While some of your customers may pay you in cash, remember that Cash sales can also include:

  • debit and credit card payments
  • direct bank transfers
  • payments made through online payment service providers like PayPal (if you sell goods online)
  • cheques

To prepare your cash flow, you need to estimate how much income you will receive over the next 12 months, including VAT - and how much of this is likely to be Cash sales. To do this you will need to work out how many items you are likely to sell, at what price and when you will receive the money. You will also need to decide on the services you will offer and what you will charge for them.

Bear in mind that, as a business-to-business supplier, the majority of your business income is likely to be in the form of 'Cash from debtors' (payments from account customers) rather than Cash sales.

There are a number of things to consider when you make your estimates:

Type of business

  • who will your customers be - will you sell exclusively to business customers or will you target members of the public as well
  • where will your premises be and how many outlets will you have
  • will you sell online - you might perhaps operate as an internet-only business. You may decide to sell through eBay or Amazon as well as - or instead of - your own website
  • will you offer a delivery service
  • what will your opening hours be
  • will you join a specialist buying group or co-operative

Your products

You will need to consider the range of office products you will stock. Will you:

  • specialise in a certain type of product, such as furniture
  • stock a comprehensive range of different lines or just a core selection of essential office supplies
  • offer catalogue or online sales, particularly if space is at a premium
  • sell electronic products, such as computers and printers

Your services

There are a number of services you might offer your customers, such as:

  • photocopying and scanning
  • cartridge refilling
  • delivery
  • online sales
  • account facilities
  • a loyalty scheme

Pricing

  • what will your pricing policy be (don't forget, you must be able to cover your costs, overheads and drawings)
  • how often will you review your prices
  • what will your policy be on exchanging goods
  • will you offer discounts, special offers and so on

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.