Forecasting cash ow*
The cash ow forecast template will help you detail the cash coming into and going
out of your business on a monthly basis so you can forecast future surpluses and
The template automatically calculates the
following on a month-to-month and total
basis for the forecast period:
• Total receipts – incoming cash
• Total cash payments – outgoing cash
• Net cash ow
• Closing bank balance
By entering your expected incoming
receipts, you’ll have a better idea of issues
Use last year’s sales or your current sales
history, if any, as a basis for upcoming
sales. Take any opportunities or threats into
account. If you’re a start-up, you’ll need to
look at industry trends, market demand, and
your competitors, to come up with expected
sales estimates for the coming months.
All businesses have bills to pay each month
such as direct costs like materials, stock,
and packaging, and overhead like rent,
taxes, power, website hosting, salaries, and
insurance. They all add up.
This information is critical in ensuring that
you set the right sales targets.
Predicting money in and
Forecasting your receipts and comparing
them to your expenses each month is useful
in establishing targets, monitoring your cash
on hand, keeping an eye on your expenses,
and addressing any projected shortfalls or
windfalls. It’s all about money coming in
versus money going out – hopefully with a
If it looks as though you’ll come up short,
you may want to start a conversation with
your business banker about a short-term
Answer the ‘what if?’ question
Use the cash ow forecast template to run
through scenarios such as:
• What if you hire a full-time sales
• What happens if you borrow money?
• What if you add new equipment?
• What if you Increase capacity?
Use the template to crunch the numbers,
taking into account additional revenues
your investment might bring in, as well as
How to use the template
Enter an estimate for the following
information into the template:
1. Opening bank balance – the cash you
have on hand.
2. Receipts – sales and other revenue
for each month.
3. Direct costs – materials, stock, and
4. Overhead costs – recurring monthly
costs such as rent & utilities.