How to Track Your Net Cash in 10 Minutes a Month

The simple system SMBs use to survive tariffs, fund growth, and beat 44% financing odds.

Good Morning!

  1. Feature: How to Track Your Net Cash in 10 Minutes a Month (5 min read)

  2. From the Archive: The One Factor That Determines Your Business Success​ Read it here.

The week's underway—move with clarity, move with intent.

-TCoL

Missed our last feature article? Will Your SMB Beat the 2025 Tariff War? 
Read it here.

☕ For just $7.95/month—less than your Starbucks run—unlock The Co. Letter Premium and get instant access to our growing library of professional business templates. This week’s new template is a proven Net Cash Tracker in an Excel spreadsheet. Protect your business today! [Get Premium Now].

Be smart. Save money. Use TCL templates.

Editor's Note: There are many ways to calculate net cash, depending on your industry and complexity—what follows is a simple, quick method to get you started—the same practical approach used by many CEOs, CFOs, and controllers. As your business grows, you can easily modify or automate it. Most importantly, set a target that fits your business cash flow needs.

Net Cash: The Easy Tracker Every SMB Needs to Win in 2025

Running a small or medium business without tracking cash is like flying a plane blindfolded. Sure, you might feel like you're headed in the right direction—until you hit a mountain.

In 2025, that mountain could be tariffs (145% on Chinese imports, 10-25% on Canadian goods), rising costs, or the brutal reality that 44% of SMBs struggle to get financing (PYMNTS Intelligence, 2025). Net cash tracking isn't optional anymore.

For the 25,000+ entrepreneurs who read The Co. Letter, our Net Cash Spreadsheet is the perfect first step—a simple, powerful tool designed for business owners without a CFO. Whether you run an AI startup, a local bakery, or a construction company, you can get started in minutes, not weeks.

Why Net Cash Beats Gut Instinct

A major complaint among startup employees is that founders keep cash needs in their heads and trying to manage or explain cash needs without a clear picture hurts businesses and frustrates employees trying to help.

Net cash—the cash buffer you actually have after paying expenses—is your runway. It tells you if you can make payroll, pay rent, or seize growth opportunities. It’s a real number, not a feeling.

Banks and investors don’t fund hunches. They fund solvency.

Example: A bakery averaging $50,000 net cash can afford to buy a delivery van. A tech startup with $80,000 in the bank risks missing payroll. Mental math invites disaster: PYMNTS reports 13% of underfunded SMBs fail early, especially new LLCs flying without a CFO.

Good news: Tracking net cash takes 10 minutes a month—and gives you control.

What Net Cash Tracking Really Does For You

Successful SMBs don't "sort of" track net cash. They treat it like oxygen.

  • Companies with clear net cash targets raise capital 30% faster (FundersClub).

  • They’re 50% less likely to fail within three years (Vistage, 2025).

Net cash gives you:

  • Clarity: Know what you can afford today.

  • Credibility: Show stability to lenders and investors.

  • Confidence: Make hires, invest, and grow without crossing your fingers.

In a world of trade wars and financing hurdles, knowing your net cash—not guessing—is your edge.

How to Set a Net Cash Benchmark for Your Business

Net cash can be calculated many ways. Different companies may include different items depending on their needs. But to get started, you need something simple, quick, and actionable.

Here’s the basic formula:

Net Cash = (Cash + Securities + A/R < 60 Days) - Expenses

Translation:

  • Cash + Securities: Money you can spend now (checking, savings, CDs).

  • Accounts Receivable (<60 Days): Invoices due soon—collectible cash. Invoices >60 days are hard to count on.

  • Expenses: Payroll, rent, suppliers, utilities.

Example:

  • Cash and savings: $45,000

  • Collectible invoices: $20,000

  • Expenses: $19,000

Net Cash = ($45,000 + $20,000) - $19,000 = $46,000

This simple method is a starting point—the same basic framework many CEOs, CFOs, and controllers use to track liquidity quickly. As your business grows, you can easily modify and automate it, adding details like aging receivables, loan repayments, or seasonal cash needs.

Setting Your Target:

  • Aim for 4-6 months of expenses in net cash as a baseline.

  • But customize your goal based on your business. A bakery's cash cycle looks very different from a construction company or a car dealership. Set a reserve that fits your industry's risks and rhythms. Then track your actual numbers.

In 2025, businesses that build a realistic net cash cushion will be the ones that survive—and thrive.

How the TCL Net Cash Spreadsheet Makes It Dead Simple

Our Net Cash Tracker template is designed for busy owners, not CFOs and accountants.

  • Dead Simple: Input cash, A/R, expenses. Done.

  • Payroll Safeguard: Flags 5-payroll months (e.g., May 2025) so you don’t get surprised.

  • Growth-Driven: Compare your cash to your goal every month.

  • Lender-Ready: Shows your lenders and investors that you’re thoughtful and tracking important financial metrics.

  • Scalable: Start monthly. Grow into daily tracking if you run a cash-heavy business.

It’s QuickBooks, Xero, or even your bank statement—boiled down to the only number that really matters.

Practical Tips to Get Rolling

  1. Start Monthly: Block 15 minutes on your calendar—the 5th of each month is ideal.

  2. Use What You Have: Pull from QuickBooks, Xero, or your bank statement.

  3. Lean on Your Accountant or Controller: Ask them to add net cash to your monthly reports (a 5-minute task).

  4. Flag 5-Payroll Months: Watch May, July, and December if you pay weekly.

  5. Customize Your Target: 4-6 months is a starting point. Adjust based on your business's cash flow volatility.

Automate daily tracking with QuickBooks and Zapier in 30 minutes.

Why It Matters Now

2025 isn’t forgiving. Tariffs are up. Capital is tight.

A bakery with $46,000 net cash can buy local flour in bulk and sidestep tariffs. An AI startup averaging $900,000 net cash can make a smart decision whether to hire another developer while others cut back. A construction firm with a 6-month cash buffer can bid aggressively while rivals pull back.

Net cash isn't a nice-to-have. It's survival.

The SMBs who track it religiously will lead.

Ditch the guesswork. Track net cash.

Have an interesting business question and need a free bit of advice? Send your question to [email protected]. No confidential info, please!