4 Steps on How to Do a Cash Flow Forecast Template

Are you looking for a way to improve your cash flow forecasting? We'll show you how to do a cash flow forecast template in 4 easy steps.

If you’re like most business owners, you know that cash flow is important. What you may not realize is just how important it is. Cash flow forecasting can give you a clear picture of your financial health and help you make informed decisions about where to allocate your resources. One way to improve your cash flow forecasting is to use a template. A cash flow forecast template can help streamline the process and ensure that all the necessary information is included in your forecast. In this blog post, we’ll show you how to do a cash flow forecast template and what benefits it can offer.

How to Do a Cash Flow Forecast Template

A cash flow projection is an estimate of how much cash your business is expected to receive and pay out over a given period.

How to do a cash flow forecast template? The format will include a list of all the expected income and expenses for the business, and the total amount of money that is expected to be available at the end of the period.

What is a Cash Flow Forecast?

A cash flow forecast predicts how a business’s cash flow will change in the future. This prediction is based on the historical performance of your business. A cash flow projection can help you identify potential future shortfalls in cash, even when you’re business is performing well.

It’s not uncommon for businesses to run out of money, even when they’re making money. This usually happens when customers aren’t required to put down a deposit or pay upfront.

When clients don’t pay on time, business owners have to plan how they’ll cover their expenses.

For example, sales for January totaled $50,000 but they won’t be paid until 30 days later. This means the $50,000 in revenue is “tied up” in receivables.

The business appears to be doing well on paper, but all of its sales are currently locked up in unpaid invoices.

If the company does not receive enough payments from its clients, it will not be able to cover its expenses. They will receive money from customers once a sale is made, but until then, they will likely struggle to pay the bills.

A cash flow projection allows you to see how much cash you expect to come in and go out during a defined period. This ignores any sales and purchases on credit and any payables and accruals.

If you want to accurately estimate your upcoming expenses, you should take a look at your recent cash flows. This should give you a good idea of what to expect.

Most small business owners want to avoid any complications with their accounting so they can focus on selling. However, it is essential to track and forecast cash flow to start, operate, and expand a business successfully. This may require time and effort, but it will be worth it in the long run.

In 2018, 29% of businesses that ran out of money ended up failing.

A cash flow forecast is a critical tool for all businesses, large and small. By estimating future cash inflows and outflows, businesses can avoid the fate of running out of cash and failing.

Why Use a Forecast Template?

Using a cash flow forecasting tool can help you prepare for any unexpected changes in your cash flows. By automating the process, you can reduce the amount of time it takes you to create a reliable and accurate forecast for your small business.

It’s important to have a solid cash flow strategy in place, as you never know when an unexpected expense might pop up.

Just recently, one of our clients went bankrupt, leaving them with massive debt that affected their ability to pay us on time.

Understanding the long-term implications of a major unexpected incident like this one is crucial to ensure the right decisions can be made fast, so your company can bounce back.

A forecast template can help you do just that. By anticipating the potential financial impact of an event, you can make informed decisions about how to protect your business and ensure its long-term success.

This means quickly generating a cash flow forecast to navigate through a sudden change in the flow of money such as insolvency.

The Benefits of Cash Forecasting

You may think that cash forecasts are only for big businesses, but that’s not the case.

It is extremely important for every company. Here’s why:

  • Identify potential problems. Forecasting your cash situation can give you an idea of the months ahead when you may have trouble paying your bills. It can also help you adjust your business plan or pricing structure, if necessary.
  • Soften the impact of cash shortages. When you know ahead of time that you’ll face a cash flow crunch, you can prepare for it. You can start saving more in periods when you have extra cash, work to increase your accounts receivable, or take out a bank loan to ensure you have enough money to get through that period.
  • Keep suppliers and employees happy. When you can accurately predict how much cash you will have available in a given month, you can pay your employees and suppliers on time.

How to Create a Cash Flow Forecast Template

Step 1: Create a column for every month you plan on running your forecast.

Step 2: On the left side, record all the incoming and outgoing expenses your business incurs. This could include things like online purchases, in-person transactions, employee wages, and rent.

Step 3: Under the relevant categories, enter your monthly incoming and outgoing costs. These are items you know about, such as your rent.

Step 4: Project your incoming and outgoing costs under each of your months. This includes your predicted sales as well as any additional costs you anticipate.

For instance, an increase in shipping prices because of increased customer demand or the cost of renting office space rising at the beginning of the year.

To create a budget for cash flow, first look at past sales numbers. Then, consider how current trends and future events will affect your revenue. Use this information to create a range of possible inflows. Then, use a standard template to create your financial plan.

Bonus Tips for Cash Flow Forecasts

Here are two more tips to help you create and use your own cash flow forecasting.

1. Set a Realistic Time Frame

If you’re pressed for time, you can shorten your forecasting window, which will decrease the amount of info you need to enter. This can help you focus on the important stuff.

Focusing your forecast on a 13-week window can help you maintain discipline and focus on your projections in an emergency situation or fast-paced environment.

Forecasts can be created more quickly, but still enable you to gain insight into your short-term cash position, so you can act quickly if needed.

2. Plug Into Technology

According to QuickBooks, 50% of UK small businesses use Microsoft Excel to calculate their bills, but it’s time-consuming and can lead to mistakes. Technology can automate this process for you, so you’ll have more time to focus on your business.

Accurate forecasting is all about reducing how much you have to do manually. The right technology can take the leg work out of calculating, leaving you more time to concentrate on other tasks.

Accounting software can help you forecast more accurately, set up budgets, and track your incoming and outgoing expenses.

A cash flow projection allows you to easily predict when you’ll have a positive or negative balance in your checking account. This helps you determine when to pay business expenses and when to save.


It’s important to learn how to do a cash flow forecast template as this can be a valuable tool for business owners who want to improve their forecasting. It can help streamline the process and ensure that all the necessary information is included in your forecast. When used correctly, a cash flow forecast template can give you a clear picture of your financial health and help you make informed decisions about where to allocate your resources.


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