Cash flow forecast: do you always have enough money?
See per month and per year how much money comes in, goes out and remains.
Step 17 of 18: Online business plan
Video: how to read the cash flow overview in the Business Planner.
A business can make a profit and still run short of cash. A large purchase, a loan repayment or revenue that arrives later than planned: your bank account notices it sooner than the profit and loss statement. The cash flow overview shows how much money comes in, goes out and remains in each period. You don't have to build it yourself. The Business Planner creates it from everything you entered under revenue, costs, and investments and financing.
Where do you find the cash flow?
In the financial plan, go to Review and choose the Cashflow tab. At the top are the key figures, such as the cash at the end of the planning horizon. Two of them are especially useful for cash flow:
- Runway: the number of months until your cash runs out. If your cash stays positive for the whole horizon, there is no limit.
- Break-even: the month in which your cumulative profit turns positive.
Three flows and your cash position
| Line | What does it contain? |
|---|---|
| Operating cash flow | The money from your day-to-day business: receipts from clients minus the costs you pay. |
| Investing cash flow | Payments for investments, such as furniture or a renovation, in the month you buy them. |
| Financing cash flow | Loans and owner equity coming in, and the repayments you make. |
| Net cash flow | The balance of the three flows in that period. |
| Cash position | The amount in the bank at the end of the period. |
Look at the first year month by month
Per year, the picture often looks calm. Switch the view to Monthly, and you see whether money gets tight at any point. In the demo salon, the investment in the renovation and the new chairs weighs heavily on the cash in the first month. The loan and the owner's own contribution absorb that, after which the cash position rises every month. With the buttons for year one or years one to three, you limit the table to the period you want to see. Export CSV takes the figures to a spreadsheet.
To the right of the table, the planner sums up the main insights, for example whether your cash stays positive for the whole horizon.
An investment costs cash right away, but only counts as a cost later, through depreciation. A loan repayment comes out of your cash, but it is not a cost.