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Creating a Cash Flow Forecast: Free Template Included

Guides

A cash flow forecast serves as an essential tool for effective financial management, enabling businesses to make informed decisions and ensure financial stability and growth.

Our complimentary cash flow forecast template empowers you to plan either a weekly or monthly cash flow projection effortlessly.

How to Use the Cash Flow Forecast Template

  1. Choose Your Frequency: Select either a monthly or weekly basis (or use both tabs) based on your preference and needs within the template.
  2. Extend Your Projection: Add extra columns if you require an extended forecast period.
  3. Starting Balance: Input your bank statement’s opening balance into cell C6 (highlighted in yellow).
  4. Track Transactions: Log your receipts and payments with their descriptions in the relevant columns.
  5. Automatic Calculations: The template automatically calculates closing balances for each period, carrying them forward for the next month or week.
  6. Review and Analysis: Analyze the cash flow to identify potential shortfalls or surpluses.

What to Include in Your Cash Flow Forecast

Your cash flow forecast should encompass all bank and cash receipts and payments. Begin by reviewing your bank statements to identify regular transactions. This analysis helps determine the anticipated levels of weekly or monthly customer receipts and supplier payments, forming the basis for your forecast.

Why Your Business Needs a Cash Flow Forecast

Businesses rely on cash flow forecasts for several crucial reasons:

  1. Financial Planning: Forecasting cash flow assists in preparing for future financial needs, ensuring readiness for operational expenses, supplier payments, and inventory management.
  2. Informed Decision Making: It aids in setting realistic budgets, identifying cost-saving opportunities, and determining optimal times for investment or expansion.
  3. Anticipating Financial Trends: Predicting cash flow helps in preparing for cash shortages or excess funds, allowing proactive measures like seeking additional financing or optimizing surplus funds.
  4. Efficient Working Capital Management: Understanding cash flow patterns enhances working capital management by optimizing inventory levels and controlling receivables and payables.
  5. Demonstrating Financial Health: A cash flow forecast showcases the company’s ability to meet financial obligations, instilling confidence in investors, creditors, and lenders.
  6. Risk Mitigation: It identifies potential financial risks, enabling the development of contingency plans to ensure business continuity.
  7. Loan Application Requirement: Lenders often require cash flow forecasts as part of loan applications, demonstrating the business’s capability to repay loans and enhancing the likelihood of securing financing.

By creating a comprehensive cash flow forecast, businesses can strategically plan, mitigate risks, and ensure financial stability in both the short and long term. Download our free template today and take control of your business finances.

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