Many micro-entrepreneurs only find out the money has run out when the month's bills arrive and the balance does not cover them. Setting up cash flow for your MEI (Brazil's individual micro-entrepreneur regime) solves this with little effort: it is a simple record of what comes in, what goes out and what will be left over in the coming weeks. To start without building anything from scratch, use our cash flow spreadsheet: the structure for inflows, outflows and balance is already in place, and you just fill it in. Below is the minimum you need to track and a short routine to keep everything up to date.
What cash flow is, without the jargon
Cash flow is the list, in date order, of all the money that comes into and goes out of the business. That is all. It answers three questions every business owner needs to know by heart:
- How much money does the business have today?
- How much will come in and how much will go out in the coming weeks?
- Will money run short at some point? When?
Cash flow is not the same as profit. A business can sell well and still run out of money because the client pays in 30 or 60 days while the supplier wants payment up front. That is why tracking looks at the date money comes in and goes out, not just at the amount.
Step 1: separate the business's money from your own
This is the step that makes the biggest difference, and the one most often ignored. As long as your household groceries and your supplier payments come out of the same account, no tracking works. You never know whether the business makes money or is being propped up by your income from another source, or the other way around.
- Open an account just for the business. Many banks offer accounts for MEIs. Every client payment goes into it, every business expense comes out of it.
- Set a fixed owner's pay. Choose an amount that you transfer from the business account to your personal account, always on the same date. It is your "salary" as the owner.
- Do not pay personal bills with the business card or account. If it happens, record it as an owner's withdrawal, so your records stay accurate.
With separate accounts, the business bank statement becomes the basis of your cash flow. It becomes much easier to check that what you wrote down matches what the bank shows.
Step 2: record every inflow and outflow
Each transaction becomes a row with four pieces of information: date, description, category and amount. Inflows with a positive sign, outflows with a negative sign, or in separate columns, whichever you prefer.
Inflows
- sales received up front, by Pix, card or boleto (Brazilian bank payment slip);
- installments from earlier sales;
- other business inflows, such as a refund of an overpayment to a supplier.
Outflows
- purchases of goods and raw materials;
- fixed bills: rent, internet, phone, software, accountant;
- the monthly MEI tax payment (the DAS-MEI), which is a fixed obligation every month, whether or not you had revenue;
- card fees, card machine fees and bank charges;
- fuel, shipping, packaging;
- your owner's pay.
One important point: record a sale on the day the money lands in your account, not on the day you made the sale. A credit card sale paid in installments, for example, comes in bit by bit. If you record it all on the day of the sale, your cash will look bigger than it is.
Step 3: use a few categories
Categories are there to answer "where is my money going?". If you create too many, you will waste time deciding where to record each item and end up giving up. For most MEIs, about eight categories are enough:
| Category | What goes in it |
|---|---|
| Sales | Every payment from a client |
| Goods and supplies | What you buy to resell or to produce |
| Fixed costs | Rent, internet, phone, software, accountant |
| MEI obligations | The monthly tax payment and other business obligations |
| Fees and charges | Card machine, card, bank, sales platforms |
| Logistics | Shipping, fuel, packaging |
| Marketing | Ads, events, presentation materials |
| Owner's withdrawals | Owner's pay and any other withdrawal for personal use |
After two or three months, you will see patterns. Maybe card fees weigh more than you imagined, or logistics is growing faster than sales. That is the information that helps you make decisions.
Step 4: track the balance and project 90 days ahead
Recording the past is half the job. The other half is looking ahead. A 90-day projection shows in advance whether money will run short, and gives you time to act before things get tight.
How to build the projection
- Start from today's balance in the business account.
- Add what has a set date to come in: installments receivable, boletos issued, contracts with monthly payments.
- Subtract what has a set date to go out: fixed bills, the monthly tax payment, installments on purchases, owner's pay.
- Estimate new sales conservatively: use the average of recent months, never your best month.
- Look at the projected balance at the end of each month. If any month ends negative or close to zero, that is where you need to act.
An example with round, fictional numbers, just to show the logic:
| Month (example) | Opening balance | Expected inflows | Expected outflows | Closing balance |
|---|---|---|---|---|
| Month 1 | R$ 2,000 | R$ 6,000 | R$ 5,500 | R$ 2,500 |
| Month 2 | R$ 2,500 | R$ 4,000 | R$ 6,000 | R$ 500 |
| Month 3 | R$ 500 | R$ 5,000 | R$ 5,500 | R$ 0 |
In this example, month 2 includes a large inventory purchase and month 3 closes at zero. Whoever sees this two months in advance has options: negotiate terms with the supplier, bring forward a client's payment, postpone an expense that can wait or step up prospecting to close new sales in time. Whoever only finds out on the day has far fewer ways out.
Safety reserve
Try to keep a reserve in the business account that covers a few weeks of fixed costs. It absorbs a late-paying client or a weak month without you having to dip into your own pocket or turn to expensive credit. Start small and build it up.
Step 5: a 15-minute weekly routine
Cash flow only works if it is up to date. The best way to make sure of that is to have a fixed time slot each week, like a meeting with yourself. Fifteen minutes is enough once the habit is in place:
- Open the business account statement and record everything that came in and went out since last time.
- Check the balance: the spreadsheet balance must match the bank's. If it does not, find the difference now, while your memory is fresh.
- Look at the bills due in the next seven days and confirm the money is there.
- Look at your receivables: who is late? Send the payment reminder the same day.
- Update the projection with the sales closed during the week and any new expenses.
Once a month, set aside a bit more time to look at the totals by category and compare them with the previous month.
Common cash flow mistakes for MEIs
- Mixing accounts: without separation, no number can be trusted.
- Recording only large expenses: charges, fees and small purchases add up by the end of the month.
- Counting on a sale before you get paid: a closed order is not money in the account.
- Forgetting fixed obligations: the monthly MEI tax payment is due every month, even in a month with no sales.
- Withdrawing money without a rule: without a set owner's pay, the business's cash becomes an extension of your personal wallet.
- Updating only when things get tight: tracking done in a crisis comes too late to prevent the crisis.
- Giving discounts without doing the math: a discount that looks small can eat up a good part of what would be left from the sale.
Cash flow also helps you sell better
With your cash organized, you know how much you can invest in prospecting without putting the month's bills at risk. You also find out which clients pay on time and which tend to be late, which helps you choose better who to close with and on what terms.
If the projection shows a tight month ahead, the healthiest response is usually to generate new sales, not just to cut costs. Meetings with companies that are already looking for what you offer shorten that path. It is worth understanding how an online business round works and including this channel in your plans for the coming months.
When to call your accountant
This guide covers day-to-day money management, not tax matters. Questions about eligibility, the MEI revenue cap, invoices, the annual return or when to switch tax regimes are a matter for an accountant. With your cash flow up to date, that conversation becomes faster and more useful, because you arrive with your numbers organized.
Summary
Separate the business account from your personal account and set an owner's pay. Record every inflow and outflow on the date the money moves, use a few categories, track the balance and project the next 90 days. Set aside 15 minutes a week to keep everything up to date. It is the minimum that gives an MEI real control over their own business.
And when the time comes to look for new sales, your company's first online business round is on us: all it takes is an active CNPJ (Brazilian company tax ID), once per CNPJ, and contact details are only shared when both sides mark interest. See the upcoming business rounds and save your spot.