Cash Flow Forecasting
Plenty of profitable small businesses run into trouble not because they aren’t making money, but because they run out of cash at the wrong moment. Invoices go unpaid for 60 days, a tax bill lands the same month as a big supplier payment, or a slow quarter eats into reserves faster than expected. Profit is a measure of performance over a period; cash flow is whether you can actually pay the bills in front of you this week. Forecasting is how you see the difference coming before it becomes a crisis.
What a Cash Flow Forecast Actually Does
A cash flow forecast is a rolling view of money coming in and going out over the weeks and months ahead, built from what you already know: confirmed invoices, regular outgoings, payroll dates, loan repayments, and tax due dates. It won’t predict the future perfectly, but it turns vague unease about money into specific numbers on specific dates, so you can see a shortfall two months out rather than discovering it the day a payment bounces.
Where Small Businesses Get Caught Out
The same blind spots come up again and again: seasonal dips that aren’t accounted for outside peak trading months, VAT quarters and payments on account landing in the same period as other big costs, customers who pay late even when terms say 30 days, and one-off spending (new equipment, a hire, a deposit on premises) that looks affordable in isolation but strains cash when it lines up with everything else. A forecast surfaces these clashes months in advance instead of at the point they hit the bank account.
Keep It Simple, and Keep It Current
A forecast doesn’t need to be a complex model. A simple rolling 13-week cash flow, updated weekly or monthly against actuals, is usually more useful than an elaborate annual projection built once and never revisited. The value is in the habit of updating it regularly and comparing forecast to actual, not in how sophisticated the spreadsheet looks.
When to Bring In Help
If you’re relying on your bank balance to tell you how the business is doing, or forecasting has always felt like guesswork, it’s worth having someone build the model with you rather than starting from scratch alone. At Multiply we build and review cash flow forecasts alongside clients as a normal part of the numbers, not a one-off exercise. If that would help, get in touch with your usual contact at Multiply.
