how do you work out how your cash flow forecast might look in a 6 months?

Answer 1

C/F forecast is only worth doing if you do it properly, otherwise it's a waste of time. This means thinking through in great detail all the income you expect to receive, and when you actually think you can bank it (in other words, don't think invoice date, or even due date, is the same as when the money shows up on your account!). Then doing the same for any costs and expenses you expect to incur, not forgetting fixed and unavoidable items such as rent/rates, payroll, VAT, etc. Add up everything for each month in question (or whatever is your planning time frame - could be weeks or even days if you're running a 'cash' business or money is very tight) and see where you might go into red (or exceed any credit facilities you have). Then try to move around those things which you can, to see if it stacks up better. Once you've gone through this process you not only have a good solid C/F but also a better understanding of where and when money goes in and out of your business.

Answer 2

There are various ways.

1/ Is the simpliest way.......simply annualize the 6-months you already have.

2/ Take a weighted average of past 3-years.

3/ Use industry average ratios to generate a proforma statement.

Answer 3

Hi Mate

If you wish to - email me the figures & I will do it for you.

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