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Free Cashflow Forecast Template


 
Whether you’re preparing to launch or are already trading, cashflow forecasting is one of the most important aspects of running a business.
 
Your cashflow forecast can support you to plan how much you expect to make in sales, how much you expect to spend and will help you understand when cash will come into your bank account.  
 
Making a cashflow forecast can initially appear a daunting task, however, the easiest way to complete a cashflow forecast is to break it into small and manageable steps. Below are 5 key stages to help you when completing your cashflow forecast.
Estimate how much money you will bring in 
 
The first step in preparing your cashflow forecast is to estimate how many sales you can expect to generate on a weekly or monthly basis. To do this, refer to your previous sales history, your businesses performance over time, and any trends and patterns in your sales. By reflecting on your previous performance, you should be able to generate an idea of your approximate weekly and monthly sales.
 
If you haven’t already started trading, it’s beneficial to complete a seasonality exercise for all the different products or services you will be offering. Using your knowledge of your business and its market, a seasonality exercise will allow you to estimate how many weekly or monthly sales you can expect to generate for each of your business’s product or service and the average amount of money spent on each product and service. This will give you a rough estimate of how much money your business can expect to make.
 
Understand how you will be paid
 
Depending on the nature of your business, the money you earn may not always be received immediately. For example, if you run a subscription-based business, then you may be expected to wait a period of time before payment is processed. It’s therefore crucial to estimate when you expect the payment from your sales. Consider typical methods of payment and the time it takes to process these payments – think, for example about deposits and invoicing payment delays - and account for these within your cashflow forecast.
 
Consider how much you're expected to spend
 
Your cashflow forecast also needs to reflect your outgoings as a business owner and include your fixed and variable spends. Fixed costs can include factors such as rent, salaries, and depreciation on equipment, whereas variable costs are directly associated with the sale of the product or service you supply. If you’ve been trading for a period of time, then it may be possible to estimate some of the variable costs depending on trends and patterns you’re your business’ previous outgoings.
 
While it is easy to consider monthly outgoings, it is important to also think about any annual fees your business may have to pay, such as a subscription to a service or product.
 
Collate your income and expenses
 
After collating an approximate value of your expected income and expenses, it’s key to then bring these figures together to get an approximate cashflow forecast. Using our free to download cashflow template, first add in your estimated sales (don’t forget to include any VAT collection too). Then, input your direct costs and variable costs (which must match up with your estimated income fluctuations). Your bottom line will tell you how you are doing each month and for the whole year.
 
Review your estimates
 
Once you’ve completed your cash flow forecast, remember to refer back to it on a timely basis to review your estimates against your actual cash flow. By doing this, you will highlight any major differences between estimated and actual income and outgoings, and you can act quickly if you don’t make enough money or make more than expected.
 

 


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