What information is required to prepare a cash flow forecast?

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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