Business Finance
Building a cash flow forecast you will actually use
Profit and cash are not the same thing. A simple thirteen-week forecast is one of the most useful tools a small business can keep.
23 June 2026 · 6 min read
Profitable businesses run out of cash. It happens when money goes out before it comes in: stock bought ahead of sales, staff paid before clients settle, VAT collected and then spent. A forecast is simply a way of seeing that coming.
Start with thirteen weeks
A quarter is long enough to reveal pressure points and short enough to estimate honestly. List your opening bank balance, then expected receipts and payments week by week. The closing balance of each week becomes the opening balance of the next.
Be honest about timing
- Use the date customers actually pay, not your invoice terms.
- Include VAT, corporation tax and PAYE as separate dated lines.
- Include the irregular items: insurance renewals, software annual fees, equipment.
- Include your own drawings or dividends; they are real outflows.
Then use it
A forecast is only valuable if you compare it with what happened. Update it weekly, note where you were wrong, and your estimates will improve quickly. Within a couple of months you will have something that genuinely guides decisions: when you can hire, when to invest, when to hold.
If a tight week appears eight weeks out, you have eight weeks of options. Found on the day, you have none.
This article is general information, not advice for your specific circumstances. Check current requirements before acting. Our team can help you understand how the topic relates to your business and agree any support you need.