State Government of Victoria. A cash flow forecast is the most important business tool for every business. The forecast will tell you if your business will have enough cash to run the business or pay to expand it. It will also show you when more cash is going out of the business, than in.

Free Cash Flow Statement Template, Example and Guide

Use below Cash flow worksheet to forecast and record cash flow. The worksheet will update your figures as you type. The easiest way to prepare a cash flow forecast is to break the task into several steps.

Free Cash Flow Statement Template, Example and Guide

Then bring all the information together at the end. The five steps to preparing a cash flow forecast are:. Cashflow forecasting template XLSX Then decide what adjustments you will need to make based on past trends, i. Note that sales figures always change because they depend on various factors, such as the types of customers you sell to, how quickly they have to pay you, what the economy is doing e.

When you calculate your cash outflows, work out what it costs to make goods available. By doing this, if you do need to adjust your sales numbers later eg you actually sold 10 units in March when you thought you would sell five , it will be easier to adjust actual cost of goods sold.

Expenses can be money spent on administration or operation. Again, expenses depend on the type of business you are starting or already run. At the beginning you will have decided the period the forecast should cover. Since cash flows are all about timing and the flow of cash, you will need to have an opening bank balance i. The number at the end of each month is referred to as the closing cash balance and this number becomes the opening cash balance for the next month.

This is the most important step of all. Remember that cash flow is all about timing and the flow of cash, so when preparing your cash flow forecast, make sure you are as accurate as possible on the timing of the cash flows. Read more about Entrepreneurs revel their cash flow advice.

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Open search form Business Victoria. Home Money, profit and accounting Getting paid on time. Discount strategies Pricing strategies that work Infographic: On this page Cash flow forecast Estimate accuracy. Important There are two ways to improve how you manage your cash flow.

The first is working capital management managing stock , managing suppliers and debt recovery. The second, described here, is using cash flow forecasting.

Fundamental Analysis: The Cash Flow Statement

The five steps to preparing a cash flow forecast are: GST rebates and tax refunds owners invest more money add extra equity in the business government or other grants loans are paid back to you or you sell an asset other sources such as royalties, franchise fees, or licence fees.

Prepare detail on all estimated cash outflows and expenses When you calculate your cash outflows, work out what it costs to make goods available. Prepare your cash flow forecast by putting all the gathered detail together At the beginning you will have decided the period the forecast should cover.

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