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This way, if you need to adjust your sales numbers later (for example, if you actually sold 10 units in March when you thought you would sell 5), it will be easier to adjust actual cost of goods sold.Įxpenses can be money spent on administration or operation. When you calculate your cash outflows, work out what it costs to make goods available. other sources such as royalties, franchise fees, or licence fees.owners investing more money (adding extra equity) in the business.These will vary from business to business but might include: Next you'll estimate your 'cash inflows', or sources of cash other than sales. changes in the economy such as interest rates and unemployment rates.your customer base and how quickly they pay you.This will give you an idea of how much money the business needs to bring in to cover it.īut keep in mind that sales figures can change all the time depending on: If you're a new business and don't have past sales figures, start by estimating all the cash outflows. You can make adjustments to your sales forecast based on whether sales increased, decreased or stayed the same. To forecast your sales, look at last year's figures to see if you can spot any trends. Forecast your income or salesįirst, decide on a period that you want to forecast. You can follow along with our template.Ĭash flow is all about timing, so when preparing your forecast, try to be as accurate as possible on the timing of your inflow and outflow estimates. It will also show you when more cash is going out of the business than in.įollow these steps to prepare your cash flow forecast. making a cash flow forecast to estimate your income and expenses in the futureĬash flow forecasting involves estimating your future sales and expenses.Ī cash flow forecast is a vital tool for your business because it will tell you if you'll have enough cash to run the business or expand it.managing your working capital ( managing stock and payments to suppliers, and recovering debts).A positive cash flow will have more money coming in than going out. Your business's cash flow is represented in a cash flow statement. But it might also be money from debt repayments, selling unnecessary assets, rebates and grants. Cash flow is the amount of money that goes in and out of your business.Ĭash flowing in is most often the money you get from sales.