cash flow forecast tool: 

Is great for planning your business activities and resources Ensures your business activities are correctly aligned with each other Supports you in making sensible, realistic decisions for your business Gives you greater control over your business finances Allows you to better understand your business performance Helps you plan for the future.

A cash flow forecast is made up of three key sections: 

1. Revenue – money coming in This section is where you list any money that you have coming in to the business such as product or service sales, equity or other investments and your Start Up Loan. The number of items you include will depend on your business model, but a typical revenue section includes between three and six items. You add all of these sources together to figure out your total income (A). 

2. Expenses – money going out This section is where you list any of the expenses your business incurs, like your premises rental, staff wages, council tax, supplier costs, marketing and promotional expenses etc. You’ll need to think about costs that do not occur on a regular monthly basis, like V.A.T. which is only payable every quarter. 

Don’t forget to include things like your own salary, Start Up Loan repayments, or specialist expenses you are likely to incur. Again, the number of items you include will depend on your business model, but a typical expenditure section can be anywhere from 10 to 20 line items. You add all of these sources together to figure out your total expenses (B). 

3. Net cash flow – the balance This final section is the difference between your total revenue (A) and your total expenses (B). 

e.g. “total income (A) – total expenses (B) = Net cash flow” If this figure is negative, it means that you are anticipating your expenses will be greater than your revenue in that period; 

conversely, if the figure is positive, it means you are anticipating your revenue to be greater than your expenses and to deliver a profit.