Cash Flow Forecast Checklist
What a 12-month rolling cash flow forecast needs, and how to keep it useful. Know where your business stands financially.
Gochi Finance reports the cash that came in and went out, straight from your books and bank, so last month's actual figures are ready when you update your forecast.
Why cash flow kills profitable businesses
More businesses fail from cash flow problems than from lack of profitability. You can be growing fast, winning clients, and generating revenue, and still run out of cash if your timing is wrong. A 12-month rolling cash flow forecast is one of the most useful financial tools a business owner can keep.
What a good forecast includes
- Money coming in each month: sales receipts, loans, investment
- Money going out each month: salaries, rent, suppliers, tax
- Opening and closing cash for each month
- The minimum cash you want to keep, so a month that falls below it stands out
- Three versions: best case, expected and worst case
How to use it well
Update your forecast at the start of every month with the actual figures from the month before. The forecast becomes more accurate over time as you build a history of your business's patterns.
Pay particular attention to the months where your closing cash approaches your minimum. Those are the moments to act, not when you've already run out of runway.