Have You Checked Your Cashflow Forecast?

You’ve read enough of my blogs by now to know that when I mention ‘forecasts’ I’m not talking about the weather – although cash flow forecasting will certainly tell you whether things are looking sunny or not! In a nutshell, your cash flow forecast is an estimation of what cash you have coming in and going out of your business over a set period of time.

Your forecast is based on your projected business income and expenses and is vital when it comes to making business decisions – especially anything to do with funding or investments. I’ve known too many business people over the years who don’t place as much importance on cash flow as they should and, surprise surprise, not many of them are in business any more!

I’m not saying this to scare you – it’s just a fact that not knowing your numbers, or taking a lackadaisical (I’ve been dying to get the word into a blog!) approach to your company’s cash flow is the number reason that you are likely to fail.

If you want to make hay while the sun shines, I’d recommend setting a range of time periods for forecasting your cash flow. A short-term forecast, say predicting your cash flow over the next 30 days or so, is really handy for checking on your immediate funding needs. Much like it being easier to predict whether it’s going to rain tomorrow than a month from now, these shorter-range forecasts are going to be much more accurate than your medium or long-term forecasts – not that it means you shouldn’t do those too! I’d recommend a medium-term cash flow forecast to cover the next year, and then a long-term one to cover you for the next five.

But why bother at all? After all, you’re making sales, there’s money in the bank…Well, yeah that’s all very well and good, but when it comes to your business you can’t afford to only be preoccupied with the ‘now’. Staying on top of your cash flow will help you to prepare for future cash flow problems that might occur – and that’s not me being a negative Nancy! – the truth of the matter is, we’re business people, not clairvoyants, and no one knows just what’s around the corner (not even ‘clairvoyants’ to be honest!).

Whether you’re forecasting your cash flow over the coming month or the next few years, it’s going to be one of two things:

  • Positive, meaning that you have more money coming into the business than going out.
  • Negative, meaning that more is going out of the business than is coming in.

Having an accurate cash flow prediction (remember, that’s easier in the short term) means that you can make better use of your business’s excess cash, because you can minimise the cash ‘buffer’ you need for unforeseen expenses.

It sounds simple, and with the right guidance and techniques – it is, however, a lot of companies find it difficult to forecast their cash flow accurately..


Most small business owners will tell you that it’s down to time. Or lack of it. Actually, the reality is that it is the perceived lack of time that is the issue. ‘Cash flow forecasting’ is just one of those phrases that instantly sounds arduous and time-consuming. It really doesn’t have to be that way…you can spend literally 10 minutes a day on your numbers, and stay on top of things. 

If you’re still struggling with the numbers, and you want some help with cash flow forecasts, get in touch today! I’ve been helping businesses just like yours with numbers for over 30 years – so what are you waiting for!?

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