How to avoid Excel for Cash-Flow Forecasting with this one Strange Trick
How ZeroFlucs got rid of “Cash Flow.xlsx” using ChatGPT and Python, and simplified reporting of company projections.
Enter the Dragon
I had half a dozen calls last week where I got asked the same question that every startup founder dreads — people asking for updated cash-flow projections. It’s not that we didn’t have the data, it wasn’t that the numbers didn’t look good — it was just that every time something changed, the numbers weren’t getting updated easily.
Horror — but how did we get here?
We Used to Have a Guy…..
Prior to deciding to double-down on the bootstrapping in 2022/3, we briefly had someone in the business doing a very detailed projection and model. Ultimately though we made the (in retrospect short-sighted) decision that we probably didn’t need to worry about this for a while, so as impressive as the document was — the spreadsheet fell into disuse/disrepair.
After a few swings at simplifying it down for our own internal uses, we ended up with another version that was more manageable, at least in theory.
I dived into Excel, and I tried to adjust column 14, but then column 26 onwards got crazy and I couldn’t figure out why.
It was hopeless, and despite us being profitable on paper, I couldn’t show it unless I just sent people a screenshot of the bank accounts.
Another Way
We do simulations as our business model. Normally its sports, but this time it was a much more basic problem.
Our situation was that we wanted to just simulate a series of actors (Clients, Suppliers, Staff) and progress through time, working out when we’d need to pay things and what our revenue would look like.
To that end, I did what any self-respecting 20+ year technology professional would do — I fired up ChatGPT and prayed for salvation. My plan was to code up all the expenses and revenues as YAML files per actor, and then simulate them over time.
So finally, I can say hand on heart we’ve done an AI powered simulation. But it took a long while to get where I had something workable. Prompt-engineering is a real skill, and I had to carefully guide the outputs, but essentially most of the code for better or worse came from a rolling 3am argument with Sam Altmans digital conscience.
Hello, Fin-Kit (It’s on GitHub)
After some soul-searching, decided that we’d just publish the code behind this — I figure that other startups who are struggling to produce a sensible cash-flow will find value in this, or something like it — versus fighting with your accounting software or Excel when you’ve got better things to do.
We’ve published this under our ZeroFlucs Given org:
https://github.com/zeroflucs-given/fin-kit
Using the Notebook
To use the notebook, read the README.md then create your various expenses and revenue items in the components folder, then just change the parameters at the top of the file and hit “Run All”. You’ll get, in seconds:
- A transaction by transaction simulated ledger for your business.
- A cash burndown graph showing your runway
- A costs analysis graph
Conclusion
A crazy codoral (I had the flu) and coffee fuelled session later, I’d lived the startup dream and provided detailed financial projections to everyone who was waiting on them. Its fairly limited today, but it’s still streets ahead of doing things in Excel if you’re a slightly technical person who wants to produce something with material detail.
Hopefully other startup founders who are wanting to simplify cash-flow projections will get some value out of this, and we’re happy to accept any contributions or improvements from outside ZeroFlucs if people want to pay it forward.
