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Cash flow forecast template and tutorial

cash flow forecast templateCash flow is the lifeblood of any business.  Without a healthy flow of cash, a perfectly profitable business can quickly go under. This article includes a cash flow forecast template and a Youtube tutorial to help you put it into action.




Why does cash flow matter? Let’s put it this way: “Turnover is vanity, profit is sanity, cash flow is reality.” That well-used phrase sums it up. You can easily delude yourself with turnover figures, that is the total amount of money your business brings in. Profit is your bottom line (turnover less costs). But the timely flow of cash in and out of your business is critical for survival and sustainability. You will also need a cash flow forecast if you’re applying for funding or a startup loan.

Cash flow forecasting is not difficult. This is of course something you can delegate to your accountant, but we’d strongly advise you to understand and track cash flow in your business yourself too. It simply illustrates when money is coming into and going out of the business each month. Initially you will make an estimate – or informed guess. You can then revise your estimate with actual figures at the end of each month. Over time, with experience, your guess work will become more accurate! You’ll be able to spot months in advance if the business is likely to run out of cash – perhaps due to a large order paid in arrears or a late paying client. The earlier you spot cash flow squeezes the better you will be able to deal with them, either by raising funding or reducing other costs.



Cash flow forecast template

Excel spreadsheets are perfect for cash flow forecasts. They make it easy to try out different scenarios and see the impact of small changes several months ahead. Click to download our free Cash flow Forecast Template.

Cash flow tutorial

If you don’t already use Excel, take a few minutes to watch the excellent introductory tutorial from Motion Training in the video clip below. This 10 minute introduction covers all the basics very well. It even shows you how to do graphs so that you can turn your accounts into lovely patterns! The same tutor does a few more follow-up tutorials as well, which you can find if you watch the video within YouTube.

Get into the habit of reviewing and updating your cash flow on at least a monthly basis. Effective cash flow management will take the shocks and surprises out of your business, make it much more strategic and put you back firmly in the driving seat.

Image: cash flow via shutterstock




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