Many good businesses can be profitable, but may still run out of money if they, for instance, buy big pieces of plant and equipment or have large loan repayments.
Difference between budget and forecast
A budget focuses mainly on income and expenses in your Profit and Loss Account. A cash flow forecast records all money coming in and going out of your business bank accounts. It includes items you won’t find in your profit and loss account, such as buying assets, taking out or repaying a loan, or paying taxes.
Follow the rest of the cash flow forecast series