What is a cash flow forecast?


A cash flow forecast is a financial road map which attempts to predict all the cash movements in and out of your bank account over a set period of time.

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

▶ Why you should prepare a cash flow forecast
How to prepare a cash flow forecast
Using your cash flow forecast to make business decisions

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