What's a Cashflow Forecast and Why Does It Matter?

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If you have never used a cashflow forecast before, now is the perfect time to start. A cashflow forecast is a powerful tool that helps you plan ahead for your business’s financial future. It estimates how much cash will flow in and out of your business over a set period of time, which could be weekly, monthly, or quarterly.

By using a cashflow forecast, you can:

• Pay your bills and wages on time

• Be prepared for periods when cash is low

• Plan for investments or business growth

• Make informed financial decisions

Key Terms to Know

Cash Inflow – Money coming in, such as:

• Customer payments

• Loans or investments

• Sale of assets

Cash Outflow – Money going out, such as:

• Rent, utilities, wages

• Loan repayments

• Supplier payments

• Taxes

Net Cashflow – The difference between inflow and outflow for each period:

• Positive cashflow means you have more money coming in than going out

• Negative cashflow means you have more money going out than coming in

Opening Balance – The cash you have at the start of the period

Closing Balance – The opening balance plus the net cashflow

Why It Matters

Even profitable businesses can fail if they run out of cash. A cashflow forecast gives you the visibility you need to prepare for lean periods, seize opportunities for growth, and reduce financial stress. It is one of the best ways to strengthen your financial planning and manage risks effectively.

Ready to gain more control over your cash and make your business more resilient? Schedule a clarity call with us today and let’s create a cashflow forecast that helps your business thrive year-round.