The cash question you need to answer
A business can be busy and still find cash tight. The question may be whether customer receipts will arrive before payroll, whether a purchase is affordable or how long a quieter period can be supported. Define the decision first.
What goes into a forecast
A forecast starts with available cash and expected movements over time. Sales assumptions need to reflect when customers actually pay. Include regular costs, one-off commitments and known tax payments, with the assumptions clearly recorded rather than hidden in the totals.
management accountsTesting different scenarios
Test what happens if income arrives later or a cost is higher than expected. Comparing a few realistic scenarios can show where a plan is sensitive and which information you need before committing. A forecast is a model, not a promise.
Using and updating the forecast
Review the forecast against actual receipts and payments as time passes. Updating assumptions helps keep it useful. If it is being prepared for a funding discussion, make sure the figures explain both the amount required and the intended purpose.
business funding supportYour questions, answered.
Is a forecast the same as a budget?
A budget usually sets a financial plan; a cash forecast concentrates on the timing of money entering and leaving the business.
What if my income is seasonal?
Seasonal patterns should be reflected in the timing of receipts and costs, rather than spreading everything evenly across the year.
Can a forecast support a finance discussion?
Yes. It can explain the cash requirement and repayment assumptions, although a funder makes its own decision.