Estimate your likely sales for each week or month Three easy steps to follow for a cash flow projection 1. Has a competitor changed their strategy or has a new competitor entered your market? Do you have a customer service or quality control issue? Actively managing your business in this way empowers you to ask the right questions and, ultimately, make the right decisions. If your sales are higher or lower than forecast, for example, you’ll want to find out why. When you compare your actual income and expenses with your forecasts you'll be able to see whether your business is over- or under-performing. Developing contingency plans could help you to feel more confident about running your business. Including best, worst and most likely case scenarios allows you to anticipate your cash position if you suddenly hit tough times or enter better-than-expected trading conditions. If you're considering hiring a new employee, for example, you can add the additional salary and related costs to your forecast to see the overall impact of the hire before you decide whether or not to go ahead. You can also see the likely effect of a potential business change or decision. This enables you to make more informed decisions around tax, new equipment purchases or securing a small business loan. How can it help your business?Ī cash flow forecast can make managing cash flow easier by helping to predict surpluses or shortages of cash. It includes all your projected income and expenses and usually covers the next year, though it can also cover a shorter period such as a week or month. Our cash flow forecast template helps you to track your month-by-month income and outgoings, giving you the insights you need.Ĭash flow forecast template (Monthly) (XLS, 60KB), opens in new window What is a cash flow forecast?Ī cash flow forecast is an estimate of the amount of money you expect to flow in and out of your business. Effective cash flow management helps you to anticipate and prepare for future highs and lows. Understanding business cash flow is the key to running a successful small business. An up-to-date business cash flow forecast can help you run your business more efficiently.
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