📌 Stage 1 · Plan Architecture · Assumptions · prior-period inputs and lags · 30–40 min

November and December 2025 still drive January 2026 cash

Learning goals

  • Explain why the first two months of the plan reach back into 2025 figures
  • Trace the prior-year billings through the three-tranche collection curve
  • Trace the vendor-payment and payroll-tax lags into January
  • State why opening cash is a typed input, not a formula

Concepts

The plan starts mid-stream

On Jan 1, 2026 the studio is not starting from zero. Last year's billings are still being collected, last year's vendor invoices are still being paid, and last December's employer payroll taxes are remitted in January. The Assumptions sheet captures that starting position in five typed cells: opening cash $38,000.00 (C6), prior Nov 2025 billings $61,500.00 (C8), prior Dec 2025 billings $63,000.00 (C9), prior Dec 2025 vendor invoices $9,750.00 (C10), and prior Dec 2025 employer payroll taxes $2,403.50 (C11).

Without these, January cash would be wrong by tens of thousands of dollars — and January is the tightest month in the plan.

Two collection tranches reach back

Under NET 30 terms with the Base collection curve, 45% of December's billings are collected in January and 15% of November's billings land in January as well. The Revenue Plan formulas make that explicit:

=Assumptions!$F$20*Assumptions!$C$9

Revenue Plan C18 (collected in January from last month's billings): the 45% one-month share (F20) times prior December billings (C9). It returns $28,350.00.

=Assumptions!$F$21*Assumptions!$C$8

Revenue Plan C19 (collected in January from two months back): the 15% slow-payer share (F21) times prior November billings (C8). It returns $9,225.00.

=Assumptions!$F$20*C13

Revenue Plan D18 (February): 45% of January's own billings (C13 = $48,875.00). It returns $21,993.75 — the formula the exercise has you retype.

💡 Tips:

  • The opening receivables balance is built from the same inputs: (1 − 40%) × $63,000.00 + (1 − 40% − 45%) × $61,500.00 = $47,025.00 at Revenue Plan C12.

The payment lags reach back too

Cash Flow follows the same discipline on the outbound side. Vendor invoices run 70% paid in the month incurred and 30% the next month, so January pays 70% of January's own vendor invoices plus 30% of the $9,750.00 still owed from December 2025. Employer payroll taxes are remitted the month after the payroll, so January remits the $2,403.50 accrued in December 2025 (Cash Flow C12 links straight to Assumptions C11).

Payroll itself and rent are paid in the month incurred — they are the studio's fixed drumbeat and never lag.

Opening cash is an input

Assumptions C6 holds $38,000.00 — the checking balance from the Dec 31, 2025 close, typed in as a fact. The Cash Roll-Forward starts from it in January and never asks where it came from. Treat this cell like a bank statement: reconcile it to the actual balance before you trust any downstream number.

Practice

Fixed case: Harbor Creative Studio LLC, a four-person design studio in Austin, Texas, planning calendar year 2026. Cached numbers are the Base scenario. Pale-green cells are formulas; white cells are typed inputs. The exercise opens on the sheet this lesson teaches. Cell C9 on Assumptions (prior Dec 2025 billings) is blank: retype it from the case.

  1. Find the prior-period block — The exercise opens on Assumptions. The settings block runs rows 5 to 11. C9 should be “Prior Dec 2025 billings” — it is empty in this exercise.
  2. Retype the December billings — Type 63000 into C9 and confirm it shows $63,000.00 (money format). Read the Notes cell beside it: it feeds the one-month-back collection tranche in January and February.
  3. Trace the January echo — Open Revenue Plan. C18 should read $28,350.00 (45% × $63,000.00) and D18 should read $21,993.75 (45% × January's own $48,875.00). C19 should read $9,225.00 (15% × $61,500.00 November billings in C8).
  4. Trace the payment lags — Open Cash Flow. C12 (employer payroll taxes remitted) should read $2,403.50 from Assumptions C11. C15 (vendor invoices paid) should read $11,097.50 = 70% × January's $11,675.00 incurred + 30% × December's $9,750.00.
  5. Confirm the opening balance — Open Cash Roll-Forward. C5 should read $38,000.00, linked from Assumptions C6. Revenue Plan C12 (opening receivables) should read $47,025.00.

Online exercise

The spreadsheet below is editable — follow the practice steps right on this page. Steps that need ribbon menus should be done in your own Excel with the downloadable practice file.

表格加载中…

Checklist

Work through each item; when every box passes, this lesson is done:

  • ☐ Retyped C9 = $63,000.00 and Revenue Plan C18 reads $28,350.00
  • ☐ Revenue Plan D18 reads $21,993.75 and C19 reads $9,225.00
  • ☐ Cash Flow C12 reads $2,403.50 (December 2025 payroll taxes, remitted in January)
  • ☐ Cash Flow C15 reads $11,097.50 including the $2,925.00 tail of December vendor invoices
  • ☐ Opening cash $38,000.00 and opening receivables $47,025.00 confirmed