Estimate your outgoing cashflow

In the same way that you recorded incoming cash, now look at the money which is going out from your business. This will be for a wide range of reasons including:

• Payroll
• Purchase of materials and services
• Payment for incidentals and expenses
• Tax payments
  

It’s very easy to overlook some payments, particularly if they are extremely irregular or only go out once a year. As with sales income, it’s wise to compare your estimates of outgoing payments with what actually happened in preceding months.

Calculate your ongoing cashflow

Here’s how you can put all those numbers - opening cash, incoming cash and outgoing cash, into a simple cashflow forecast spreadsheet.

Input your current cash balance. Below it, input the total of the cash you expect to receive in the next month. Remember, this isn’t the amount you expect to invoice, but the actual cash you anticipate being paid in that month.
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You can now calculate the total of your current cash and your anticipated receipts.

Below this, input the total cash you expect to pay out the month. Deduct this figure from the total cash and you’ve got your expected cash balance at the end of the month. 

This closing figure becomes the opening figure for the next month. You’ve now got a basic cashflow forecast. This should help you to predict where you might have cash shortfalls in the months ahead.

How we can help with your cashflow

We work with many UK businesses that want to minimise the disruption that comes as a result of cashflow problems. Our finance specialists help firms avoid shortfalls in working capital by sourcing alternative methods of funding, such as invoice or asset finance.

If your business could benefit from having access to additional funding, either for growth or to cover short-term issues, get in touch with us today.