A Cashflow Forecast Tool That’s Helping Business Growth
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By Sally Lomax, New Anglia Growth Hub
We are currently running a series of Profit & Progress online workshops. The three-part series has been designed specifically for micro and small businesses owners who are ready for growth. The Programme provides the knowledge and tools to give businesses the confidence to plan for and create growth.
The third workshop of the Profit & Progress workshops focuses on Financial Management and includes a close look at how to use a Cashflow Forecast tool that business owners receive as part of the course.
A Cashflow Forecast is so important to the financial management of any business, so let’s take a brief look at why.
What is a Cashflow Forecast?
Whether you are starting a new business, growing an established company, or planning growth, knowing where your cash is coming from and where it is going to can help you avoid unpleasant surprises and make better business decisions.
A Cashflow Forecast is a prediction of the money that will flow into and out of your business over a future period and when exactly these transactions are expected to happen.
Typically, forecasts cover six to twelve months, although they can be shorter or longer depending on the needs of the business. The aim of a Cashflow Forecast is to calculate if there is enough cash in your business to meet its day-to-day commitments
Why is a Cashflow Forecast So Important?
Many businesses don’t fail because they are not profitable, but because they run out of cash. A business can show a profit on paper while still struggling to pay their wages, suppliers and other bills. This is because profit and cash are not the same thing.
A Cashflow Forecast helps you to:
- Identify future cash shortages before they happen.
- Plan for additional funding requirements.
- Decide when investment is needed.
- Understand how much working capital your business needs.
- Allows you to make informed decisions about growth and expenditure
Don’t Create One and Then Never Look at it!
A Cashflow Forecast is most useful when it is reviewed regularly. The guidance recommends checking forecasts at least monthly, and more frequently if finances are under pressure.
Comparing actual results against forecast figures helps identify problems and allows you to take corrective action before problems become serious. Looking at it regularly also allows you to update any assumptions and plans.
Cashflow Forecasting is not just an accounting exercise. It is one of the most practical tools available to you. By understanding when money is likely to come in and go out of your business you can plan for growth, avoid cash shortages, secure funding when needed and make better decisions with confidence.
The Cashflow Forecasting tool that is given to participants during the Profit & Progress Programme is a simple tool which has been enthusiastically received and used to help participants plan for and grow their business with confidence.
If you are a micro or small business that is looking to grow, we offer one-to-one advice and coaching, get in touch if you need business support.
If you are keen to take part in our next P&P series, please express your interest here. They are fully subscribed for 2026 but we are planning new ones in 2027.
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Lesley van Dijk