Build a cash flow forecast
Build a cash flow forecast
Forecast when cash will enter and leave the business. Use a 13-week view for near-term decisions and a 12-month view for seasonal planning.
Start with available opening cash
Use business cash and bank balances that are genuinely available at the beginning of the period. Keep restricted funds separate. Count a transfer between your own accounts only once. Reconcile balances to records before using them as the forecast opening figure.
Put receipts in the period they will arrive
List cash sales, expected customer collections and other receipts. An invoice issued today may be paid later. Separate owner contributions and new borrowing from operating receipts. Mark uncertain amounts in your supporting notes and challenge the payment dates.
Enter payments and roll the balance forward
Include stock and supplier payments, wages, rent, transport, utilities, tax when due, equipment purchases, owner drawings and principal plus interest payments. Enter cash amounts consistently, including tax where paid; obtain local tax advice for actual liabilities. Closing cash equals opening cash plus receipts less payments. Next period’s opening cash equals that closing cash.
Review a worked example and respond
Illustration only: MWK 100,000 opening cash plus MWK 450,000 receipts less MWK 480,000 payments leaves MWK 70,000. If MWK 100,000 of receipts is delayed, the same period closes at minus MWK 30,000. Before committing, discuss collection dates, discretionary purchases or supplier terms. The workbook does not automatically insert a new loan to hide the gap.
Put it into practice
Complete the next 13 weeks, then move one expected customer receipt one week later. Identify the first shortfall and the action owner. Restore or clearly relabel the revised forecast.
Take the next step with clarity
Lending is subject to eligibility, assessment and agreed terms. An enquiry is not a loan approval.