11. How do I complete a cash flow forecast?

If cash is the lifeblood of a business, the cash flow forecast is like a heart rate monitor.

It’s one of the most useful benchmarking tools available to small business owners because you can compare your forecasts with the actual performance of your business to track your progress or identify areas that need work.

However, cash flow forecasts are entirely dependent on the quality of the information they’re based on. If data included in them are simply based on snap judgments and assumptions, the cash flow forecast itself will be of little value.

You need to base your sales and cost projections on detailed analysis, whether you have a sales track record to fall back on or you’re researching the market to find the evidence you need.

Use the cash flow forecast template to compile a document that you can continue to use to measure your business’s health and progress.

The template is split into two sections, ‘Sales’ and ‘Less Payments’.

Enter your sales figures into the first section and your costs into the second.

The template will automatically calculate your sales and costs figures for you, to show you the cash surplus or deficit remaining.

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