How I'd Create a Cash Flow Forecast

How I’d create a cash flow forecast in under 20 minutes:

(🆓 Free cash flow template included)

1. Understand your cash flow basics.

• Start with your current cash balance.
• Include all expenses (e.g., rent, payroll).
• List all income sources (e.g., sales, loans).
• Factor in one-off payments like taxes or equipment purchases.

Your forecast should give you a clear view of how cash moves in and out of your business.

2. Use a simple structure for forecasting.

• List all income and expenses for the month.
• Identify key cash flow drivers like payment terms or seasonality.
• Add balance sheet items like loan repayments or owner’s draws.
• Project cash flow for the next 3-12 months using realistic assumptions.

This step ensures you’re not missing critical cash movements, keeping your forecast accurate and actionable.

3. Build the forecast using my free template.

Start with your beginning cash balance.
• Adjust projections as new data comes in.
• Use built-in formulas to ensure totals and trends are clear.
• Input income and expenses as absolute values (no negatives).

You can also add “what-if” scenarios:
• Can you afford to hire a new employee next quarter?
• What happens if revenue drops by 20%?

4. Make informed business decisions.

With a cash flow forecast, you can:
• Adjust spending to stay within your means.
• Plan for investments with confidence.
• Spot potential cash shortages early.

Example: “If my forecast shows negative cash flow in September, I can reduce expenses in July to avoid issues.”

Go implement this now and take control of your cash flow!

PS… Grab your free template at: https://lnkd.in/d7xWergy