Cash flow is the movement of money in and out of your business. A profitable business can still feel under pressure if invoices are paid late or large costs arrive before income does. A short monthly forecast can help you make decisions with more confidence.
Our guide to cash flow warning signs can help you spot pressure early.
Use cash flow forecasting to plan expected income
List the invoices you expect to be paid and estimate when the money is likely to reach your account. Be realistic about payment terms and follow up on overdue invoices promptly.
Plan for regular costs
Include wages, rent, software, suppliers, loan repayments, VAT and tax payments. Review the forecast against your bank balance so you can see whether a shortfall may be approaching.
Regular management accounts can make the forecast more useful.
Use the forecast to act early
If the numbers look tight, you may be able to delay a non-essential cost, improve credit control or discuss payment options with a supplier. Updating the forecast every month turns it into a useful management tool rather than a one-off spreadsheet.
It also helps to plan how much tax to set aside each month.
AA&R can help you build a clear cash flow process that supports day-to-day decisions and future growth.
Get support with cash flow forecasting
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