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What is cash flow forecasting and management?

Cash flow forecasting and management is about knowing what your bank balance will be next week, or next month, or next quarter.

It is an important business process that can create huge opportunity if done correctly but can cause a lot of problems for your business if ignored…

Why Build a Cash Flow Forecast?

The amount of cash you have in your bank account dictates what you can and cannot do. Say it’s the end of the month and you need to pay your employees. It doesn’t matter how much money you are owed; either you have the cash to pay your staff, or you don’t.

This is just one example of why it is incredibly important for business owners to know how much money will be available to them at any point in the future.

According to a Dunn & Bradstreet report, 90% of small business failures are a result of poor cash flow management.

Beyond short-term cash management

cash flow forecasting

Cash flow planning and forecasting goes far beyond the day-to-day management of money in and money out. It touches on many other business areas such as when to invoice, how to collect payments, credit terms, supplier relations, capital expenditure, hiring, firing, buying, selling, reporting and more.

Planning and managing your cash is the backbone of any successful business, regardless of what success means to you.

For high growth enterprises it means you can invest smarter in growth whilst avoiding bankruptcy. If work/life balance is more important to you than becoming a millionaire, it means fewer surprises and less firefighting, freeing up your time to spend however you choose.


Looking for cloud cash flow forecasting software?

Check out Float! You can sign up for a free trial here.

Advanced CF Guide-blog


Harriet Stevenson

Conversion Marketing Manager at Float