What is a cash flow forecast?
A cash flow forecast estimates the money you expect your business to bring in and payout over time. It should reflect all your likely revenue sources (like sales or other payments) and compare them against your business expenses (like supplier payments, rent, and tax payments).
An accurate cash flow forecast helps businesses to predict future cash positions, avoid crippling cash shortages, and earn returns on any cash surplus they may have in the most efficient manner possible.
Follow four simple steps to build your cash flow forecast:
- Decide how far out you want to plan for
- List all your income
- List all your outgoings
- Work out your running cash flow
What a cash flow forecast will tell you
A cash flow forecast is for looking into the future. It will help you predict how much money will be in the bank next week, next month, or even next year, which allows you to:
- Better plan your business activities and resources and avoid overtrading
- Allows you to better understand your business performance
- Supports you in making sensible, realistic decisions for your business
- Gives you greater control over your business finances
- Helps you plan for the future
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Fleximize does not provide accounting, tax, business, or legal advice. This template has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business.
Fleximize is a multi-award-winning digital business lender dedicated to providing UK SMEs with flexible finance, done properly. Since launching in 2014, we’ve supported thousands of small businesses with over £300 million in funding.
As well as funding the underserved, we’re on a mission to drive transparency and demystify commercial finance. Business funding is evolving for the better, and we’re proud to be part of the revolution.
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