Cash flow forecast template

Cash flow forecast template

What is a cash flow forecast template?

A cash flow forecasting template is a blueprint businesses use to estimate money inflows and outflows. By calculating the net difference, the template visually communicates predicted cash balance fluctuations over a specific timeframe.

Create your cash flow forecast

What is a cash flow forecast template?

Why is a cash flow forecast template important?

When creating cash flow forecasts you can either create one from scratch or use a template. Templates help you create forecasts faster and outline which cash flow categories to track to ease the process of creating a solid prediction.

The benefits of cash flow forecasting

Cash flow forecasting is an essential tool for businesses, providing a range of advantages to aid in making well-informed decisions and maintaining financial stability. Some key benefits of cash flow forecasting include:

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Download our free cash flow forecast template to get started with a cash flow forecast for your business. To edit the template, open it in a spreadsheet software like Microsoft Word or Google Sheets.

Simple cash flow forecast template Excel

simple cash flow forecast template excel free download

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How to customise your cash flow template

To tailor the template to your business needs, you need to choose a reporting granularity (time horizon). A general principle in forecasting and data analysis is that shorter time frames can lead to more precise estimates.

1. Start with the time horizon

Cash flow forecasts can be made on a short-term and long-term basis. Among the most popular cash flow prediction frequencies:

If your primary concern is short-term liquidity management, opting for daily reporting would be advisable. However, with an extended reporting timeframe, such as a weekly forecast, there’s a risk of overlooking immediate liquidity challenges, potentially leaving your company financially strained.

Uncertain about the most suitable reporting interval? Explore the details of daily, monthly, and annual forecasting in the section below:

Daily cash flow forecasts

Daily cash flow forecasting is particularly beneficial in situations where short-term liquidity management is crucial.

This frequency proves ideal for businesses with a high volume of daily financial transactions or rapid cash turnover, allowing for real-time insights into cash positions. This, in turn, enables prompt responses to immediate liquidity challenges, facilitating precise daily decision-making.

Weekly cash flow forecasts

Weekly cash flow forecast strikes a balance between short-term granularity and a broader perspective. This is suitable for businesses with moderately stable cash flows and operational patterns. It reduces the risk of overlooking immediate challenges while offering a more efficient planning horizon.

Monthly cash flow forecasts

Monthly cash flow forecasting is appropriate when balancing short-term needs with broader financial planning.

It is well-suited for businesses with relatively stable cash flows and predictable monthly income and expenses. This frequency provides a broader overview while still capturing short-term fluctuations, offering a compromise for businesses with a moderate level of complexity in their financial operations.

Yearly cash flow forecasts

For those prioritizing long-term strategic planning, a yearly cash flow forecast is advisable. 

This is useful for businesses with stable and predictable long-term cash flows or those focused on annual budgeting. While less detailed in the short term, this frequency offers a high-level perspective for strategic decision-making, aiding in long-term resource allocation, investment planning, and addressing annual financial goals.

2. Add your opening cash balance

This process is straightforward.

Access your online bank and obtain the combined cash balance from all your bank accounts and other cash holdings. This amount serves as the starting point for your cash flow projection period, known as the ‘opening balance.’

3. Calculate revenues and other cash inflows

Now, it’s time to project the incoming funds for the coming periods. Remember to consider sources of cash beyond just sales revenue.

Make sure to consider the following cash inflows:

4. Estimate payables

Now, do the same for cash outflows. Consider all expenses and cash outflows for the upcoming periods, such as:

Cash flow forecast example

The image below shows a simple cash flow forecast:

Cash flow forecasting tips