Cash Flow Forecast
A projection of expected cash inflows and outflows.
A cash flow forecast predicts when and how much cash will flow in and out of the business over a future period. It combines expected receipts (customer payments, loan proceeds) with expected disbursements (rent, payroll, supplier payments). The forecast identifies potential cash shortfalls in advance so you can arrange financing or adjust timing.
Example
A seasonal landscaping company forecasts a $15,000 cash shortfall in February and arranges a line of credit draw in January to bridge the gap until spring revenue picks up.
Why It Matters for Your Business
Forecasting cash flow prevents the scramble of discovering you can't make payroll next week—advance warning gives you time to act.
Practical Tips
- •Update your forecast weekly with actual figures to improve accuracy over time.
- •Model best-case, worst-case, and most-likely scenarios to prepare for different outcomes.
Related Terms
More Cash-flow Terms
Burn Rate
The rate at which a company spends cash monthly.
Cash Flow
The movement of money in and out of a business.
Cash Flow Statement
A financial statement showing cash movements from operations, investing, and financing.
Free Cash Flow
Cash from operations minus capital expenditures.
Operating Cash Flow
Cash generated from core business operations.
Related Financial Guides & Resources
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