How to create a Cashflow Forecast

Introduction to Cashflow Forecasting

80% of businesses fail because of cash flow problems. Make sure yours isn’t one of them.


These lessons will help you create a 26 week cashflow forecast – and it could become the most important tool in your business. 


What is cash flow forecast ?

A cash flow forecast is a term that for some reason scares a lot of people. However it is nothing more than it says – it shows the cash that you think will come in to your business and when and the cash that you are due to pay out and when.

It is a prediction of your bank statement and bank balance for the future period.

How would a cash flow forecast help me?

Many business owners often worry about paying bills, meeting salary at the end of the month and struggling with investment decisions as they are nervous that they cannot afford the spend. 

Cashflow is the oxygen your business needs to survive – and most businesses fail due to lack of cash. Once you can accurately predict your cashflow, you can confidently plan for the future – and better manage any crisis. 


What a cash flow forecast tells you as a business owner. 

It enables you to see:

  • Whether you can afford to pay your bills and salaries
  • Recognise growth trends
  • operational problems (for example, if your sales are constant or increasing and you have less cash, chances are your bills are not being issued or paid or both)
  • How you spend and manage money
  • Areas for potential savings
  • How much you can afford to invest 
  • Highlights and helps avoid real problems 
  • Gives you financial strength to successfully execute plans
  • Banks are more likley to las you know the crunch points and can do something about them in advance.

Remember, banks are more likely to lend you money if they can see you can afford to service that debt.

Realise that a cash flow forecast is prediction /an estimate and therefore it is unlikely that it will predict the future with 100% accuracy but this is not a good reason not to have one. You will refine your process and get more accurate over time but having such a forecast could save your business now.

What should I do now?

Watch the first video and start preparing your cashflow forecast. We explain it step-by-step. 


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