5 Simple Steps to Create Your Cash Flow Forecast

  1. Project your collections: Review your accounts receivable and capture collection dates for all outstanding invoices
  2. Project cash from new business: Review your sales pipeline, order book and arrive at projected cashflow from confirmed revenue. These can be estimated billing of future months or pending milestones of current projects etc. 
  3. Project additional cash you bring to the business: Effectively this is the end result of cashflow forecast, basis your shortfall you will either fill the cashflow gap through debt or equity funding. 
  4. Project your expenses: You need to project your expenses at least for next 6 months basis the current billing/expected revenue growth and incorporate these projected expenses in the cashflow forecast
  5. Look at your accounts payable for prior period: You need to analyse your balance sheet and understand the completely list of outstanding liabilities which includes business creditors and statutory payable. Incorporate these in your cashflow statement. 

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