Cashflow forecasting

Even during the best of economic times, cashflow can be critical for many smaller businesses.

One way of making sure a business has as much control as possible over the money that moves in and out of its bank account is to put together a cashflow forecast.

Putting together a cashflow forecast allows a business to anticipate high and low points in its cash balance.

A cashflow forecast works by charting how much money is to be paid in to a business over a fixed period of time and how much money the business will pay out during the same period. It must cover only the actual sums of money received and paid out - not invoices issued and received.

The fixed period covered by a cashflow forecast can vary from a quarter to an entire year. It is usually divided into smaller sub-periods such as months or weeks or even days. The forecast will show: monies paid in; monies paid out (including such overheads as wages); the difference between the two (whether it is positive or negative); the bank balance at the start of the period; and the bank balance at the close of the period.

Forecasts usually include an estimate of the amounts of cash a business expects to receive and pay out as well as actual amounts. For established firms, this is done by setting growth predictions for the coming period alongside cashflow figures from the previous period.

Cashflow forecasts change according to trading conditions, business activity and market trends. For this reason, they must be adjusted and updated on a regular basis.

The advantage of a cashflow forecast is that it provides a business with a useful way of anticipating any downturns in its cash balance. It also helps a business decide when it is ready (or not ready) to take on additional financial commitments.

Another benefit of a regularly reviewed cashflow forecast is that it makes it easier to plot steady, sustainable business growth and to avoid the dangers of overtrading.

Call Back Request

5 + 8 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Speak to a
friendly expert
01442 275789

Monday to Thursday (8am to 8pm)

Friday (8am to 7pm)

Saturday (10am to 4pm)

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Money back service guarantee. All your Emails received by 4pm on any normal working day will be answered the same day. Should it be necessary to leave a telephone message it will be answered same day/following day latest or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new business team on 01442 275789 or email: newbusiness@sjdaccountancy.com. Our new business team is open Monday to Thursday (8am to 8pm), Friday (8am to 7pm) and Saturday (10am to 4pm)

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.