What is a Cash Flow Forecast?

A Cash Flow Forecast is an estimate of the amount of money expected to flow in and out of a business over a future period — typically weekly, monthly, or quarterly. It helps businesses predict their cash position, plan for funding needs, and avoid liquidity crises.

Components:

• Cash Inflows: Sales revenue, investment income, loans, grants.

• Cash Outflows: Payroll, rent, supplier payments, tax obligations, debt repayments.

Importance:

• Vital for financial planning and risk management

• Supports operational decision-making, like hiring, investing, or expanding

• Often required by lenders or investors for funding approvals