How to use it
- 1Date each row the first of the month, for the months you're planning. There are rows for two years.
- 2On the first row only, enter the bank balance you're starting with.
- 3Enter the cash you expect in each month: customer receipts when you expect to be paid, plus any loans, grants or money you're putting in.
- 4Enter the cash you expect to pay out, with tax bills in the month they fall due.
- 5Closing cash carries forward. Any month below zero is flagged, so you can plan for it.
- 6Each month, replace the forecast with the actual figures and roll the plan forward.
What each field means
- Starting cash
- Your bank balance at the start. First row only.
- Sales receipts
- Cash you expect from customers that month.
- Other receipts
- Loans, grants, VAT refunds or money you're putting into the business.
- Payments
- Suppliers, wages, premises, tax, loans and anything else.
- Net cash flow
- Total cash in less total cash out.
- Closing cash
- The balance carried into the next month.
- Check
- Shows Cash shortfall if the closing balance is negative.
Cash, not profit
Profit and cash run on different clocks. A sale invoiced in March may not be paid until April or later; unless you agree other terms, GOV.UK says customers must pay within 30 days of getting your invoice or the goods or service. The forecast uses the month you expect the money, which the invoice register helps you judge.
Tax bills are the outgoings most often missed. Self Assessment balancing payments and payments on account fall on 31 January and 31 July, and a company's Corporation Tax is usually due 9 months and 1 day after its year end. Put each in its month.
Keeping it useful
A forecast is only as good as its last update. Each month, overwrite the forecast with what actually happened, then look again at the months ahead. A shortfall seen three months out is a conversation with the bank; seen a week out, it's a crisis.
Licence and disclaimer
Free to use, copy and adapt for your own business or personal records. Please don't resell it or republish it as your own template.
A template is a starting point, not advice for your circumstances. Check the result against the GOV.UK guidance linked below, or ask an accountant.
Related
What else will you need?
- TemplateInvoice registerAn invoice register lists every invoice a business issues, with its unique number, customer, amounts, due date and what has been paid.Excel
- TemplateCash bookA cash book is a running record of every payment into and out of a business bank account, with the balance after each line.Excel
- ChecklistLimited company year-end checklistAt a limited company's year end, reconcile every bank and loan account, list unpaid invoices and bills, count stock, record asset purchases, review the director's loan account and check dividends were minuted.
Rather we did it?
Countify can handle this for you, for a fixed fee agreed upfront.
Questions
Frequently asked questions.
Should the figures include VAT?
Yes. A cash flow forecast follows the bank, so receipts and payments include any VAT, and the VAT you pay HMRC goes in the tax column in the month it's due.
How far ahead should I forecast?
At least 12 months, so every tax payment date falls inside it. The template has rows for 24.
Is a cash flow forecast the same as a budget?
No. A budget plans income and costs, usually on a profit basis. The forecast plans when the money actually moves through the bank.
Checked against GOV.UK on · Reviewed by Kamran Ishaq FCCA, Founder & CEO, on .
Sources: Invoicing and taking payment: payment obligations (opens in a new tab) (GOV.UK); Payments on account (opens in a new tab) (HM Revenue & Customs); Self Assessment deadlines (opens in a new tab) (HM Revenue & Customs); Corporation Tax (opens in a new tab) (HM Revenue & Customs).