Businesses use cash flow forecasting to predict when cash will come in and when it needs to be paid out. With this information you can see when you may have cash deficits and/or surpluses. A cash flow forecast enables you to be proactive and anticipate cash issues in advance. For example, you may decide to create a cash reserve or hold off on purchases if you can foresee an upcoming deficit.
If you have an established business, then you can use last year’s figures to estimate this year’s income and expenses. If you’re just starting out, you’ll need to best-guess many of the figures.
Monthly Cash Flow Forecast Template