Top 10 Tips for Building a Great Cashflow Forecast

Experts say that keeping track of all in and out of the money leads to better cash flow forecast. 

This will not only help you understand your business ups and down payment cycles but you will be able to plan for the future. Most important thing is that you will be stress free. 

The 10 steps in building a great cash flow forecast are:

1. Work Out Your Opening Balance

List out all your current sources of liquid cash such as;

• cash at bank
• bank overdrafts
• available credit on loans
• available credit on credit cards.

2. Identify your sources of cash receipts

List these in detail and identify the day of the month that they are expected to clear in your bank account.

• Customer Sales
• Debtor Receipts
• Sale of Assets

3. Total Cash Inflow

Total the above amounts up on a daily, weekly or monthly basis. The greater the detail, the better.

4. Identify your cash payments

From your accounting software, list out every single expense item that you pay. For example, stock purchases, advertising, telephone, rent etc.

5. Review bank statements

Review your bank statements, credit card statements and accounting software as there will be payments that leave your bank account that do not show up in your expenses items. Such as, tax payments, BAS payments, loan repayments.

6. Total Cash Out Flow

Total the above amounts up on a daily, weekly or monthly basis. Again, the greater the detail, the better.

7. Net Cash Movement

Subtract Total Cash Outflow from Total Cash Inflow, this will be your net daily, weekly, monthly positive or negative cash flow for that period.

8. Closing Balance

Subtract your Net Cash Movement from the Opening Balance and that will indicate your current or forecast position for the period.

9. Cash flow forecasting software free

There are many free accounting software to prepare cash flow forecasts and you should explore those options. If you don’t want to use those software then a well built spreadsheet can also be a good option as well.

Once you will accurately identify the cash flow of your business, then you can work on those matters that can improve your cash flow position.

10. One solution for all problems

For specific cash flow tips that can help your business through to the other side of COVID-19 click here.

If you’d like some guidance from our business accountants to help with your cash flow forecasts and plans, or if you have any questions, please contact your local

You can also request a call back at a time that suits you.