Cash Flow Forecasting

Are Cash Flow issues keeping you up at night?

Cash Flow Forecasting can be a bit of a mystery to some people. We like to think of it as plotting out in ‘black and white’ what will happen to your cash flow in the future (given a certain set of circumstances). A Cash Flow Forecast sets out the ‘peaks and troughs’ in the future of your cash position.

Many people think you only need a Cash Flow Forecast when cash gets tight. It’s actually very useful to run one all the time, so that when cash flow ‘troughs’ are on the horizon, you see them well in advance and can take quick action to head off issues. The keys to running a successful Cash Flow Forecast are:

Cash Flow Forecasting

Start with the correct opening bank balance (not necessarily what it says on the bank statement). It should be the ‘reconciled’ balance.

Decide on the periods of your forecast i.e. daily, weekly, monthly etc.

Enter any cash coming into the business each period (including outstanding customer payments from previous periods).

Enter any cash going out of the business each period (including outstanding supplier payments from previous periods).

Calculate the closing balance at the end of each period.

Update the forecast regularly and monitor actual versus expected balances to determine action required.

Learn how we freed up $260,000 in Cash Flow

And improved profit by $126,000, with no extra borrowings! We can do this for your business, It’s what we do!.

Book A Call

Running a successful Cash Flow Forecast will:

Eliminate stress and worry about your cash position

Give you an ‘early warning signal’ to take action to avoid running out of cash

Enable you to make business decisions with confidence your Cash Flow can cope

Free up emotional energy for managing your products/service, marketing, sales, staff and customers

Cash Flow forecasting FAQ’s

What is meant by Cash Flow forecast?

As explained in the question above, cash moves into and out of the business at various times. A Cash Flow Forecast is a report that lays out when cash will come into and out of the business.

Effectively you are forecasting what will be your bank balance at any given time in the future. It helps you to see the ‘peaks and troughs’ in your cash position, so you can fix the troughs before they occur.

How do I do a Cash Flow forecast?

Usually it’s done on a monthly basis i.e. you note the opening bank balance at the start of the month, plus cash coming in, less cash going out and the resulting bank balance at the end of the month. You can do it for as many months as you like and you will be able to see what should be your bank balance well into the future. Many people do the forecast on a spreadsheet or there are many apps you can use.

Once you’ve put it together, it doesn’t end there! You can work with the numbers to fix any issues, such as a negative balance, if you don’t have an overdraft in place. You can speed up payments from customers, slow down payments to suppliers, inject some of your own funds or borrow externally etc.

What information is required to prepare a Cash Flow forecast?

You need to know:

  • The correct opening bank balance.  This isn’t just the balance that’s on your bank statement, but the reconciled balance, which takes into account any unpresented transactions, such as transfers in and out that haven’t hit your bank account yet.
  • Funds coming in
    • How much is owed to you by customers that you give terms to pay.  You will need to factor in a timeframe for these to be paid.
    • Future expected 
      • Sales and what is the expected time customers will take to pay.
      • Loan funds and interest
      • Tax refunds/grants/subsidies
      • Shareholder/Investor funds 
      • Sale of assets
  • Funds going out
    • How much you owe suppliers that give you terms to pay.  You will need to factor in a timeframe for paying these.
    • Future expected 
      • Expenses e.g. rent, wages, advertising etc.
      • Cost e.g. goods to sell, labour and materials on jobs
      • Taxes due
      • Loan repayments and interest payments
      • Dividends
      • Capital expenditure e.g. equipment
What is the difference between Cash Flow and Cash Flow forecast?

Cash Flow is the term used to describe the activity of cash moving in and out of the business. For example cash coming in from sales, loans, interest etc. and cash going out e.g. expenses, taxes, dividends etc.

Cash Flow Forecast is a report that shows the movement of cash into and out of the business, as well as the opening and closing bank balance each day, week, month etc. The Cash Flow Forecast is probably the most important financial management tool in any business. It sets out clearly where the Cash Flow issues will be in the future, which provides an opportunity to deal with it well in advance.

What is the benefit of a Cash Flow Forecast?

Sometimes in business the movement of cash can get quite confusing… The bank balance looks OK but you’re never really sure how much of it is yours. There’s taxes to pay, outstanding supplier invoices and monthly charges. A Cash Flow Forecast plots it all out in black and white for you to see exactly what will be your cash position at the end of each month, week or day (if cash is really tight). It eliminates the guesswork so you can feel confident about your cash position. Once you’ve plotted it all out, it puts you in a position to then plan a strategy to keep it under control i.e. when to speed up money coming in and when to slow down money going out.
Re Testimonials – let’s please use Safa Glass, Power Systems Consultants and Flairs Jewellery.

Download your FREE Cash Flow Forecast Template

If you want to be proactive about Cash Flow management and eliminate the ‘peaks and troughs’ and headaches, download your FREE Cash Flow Forecast Template here.



We have an understanding of our business like never before! We now have accurate Key Performance Indicators (KPIs) which means we can make informed business decisions and grow the company profitably at every turn.

Warwick Glendenning, CEO

Power Systems Consultants Group

If you are working frantically in your business, it really doesn’t matter how busy you are – it is crucial to take the time to work on your business to ensure that all the effort is worthwhile. Our CFO On-Call is invaluable in guiding and supporting us around financial hazards.

Lesley, Peter & Joshua Turner, Directors

Flairs Jewellery

Before engaging CFO On-Call, the bank wouldn’t support me, so debtor financing was my only option. CFO On-Call set up our new management reporting and forecasting, and the bank changed their mind. Since then, we have grown total revenue by 17%, increased gross margins from 17% to 37% and improved debtor days by 36%. We’re going from strength to strength!

Peter Deverall, CEO

Safa Glass, Brisbane

Book your 30 minute call

Get Business Cash Flow Management Advice and free up some profit in your business. Book your 30 minute call with a financial co-pilot here:

  • :
  • This field is for validation purposes and should be left unchanged.