Begin the spreadsheet by entering the amount of cash you've currently got at the start of the period for which you're preparing the forecast. Then add cash inflows you expect to collect during the period.
Your cash inflows will rely on the method of payment your customers use – cash or credit. Enter the expected cash sales immediately and the credit sales when your customers are likely to pay you.
On credit sales, be specific about when the money is due for collection taking into account your customers' payment histories and the economic outlook. Then schedule the timing of payments for your business expenses. Again, it's vital that you're specific about the amount and the month each expense falls due.
Next add cash outflows from the items listed in your expenses forecast including supplier payments, loan repayments, credit card payments, and taxes. Consider regular, irregular, and seasonal payments such as rent, repairs and maintenance as required, and inventory purchases.
Finally reconcile the cash in/out section. In starting have a section for the Opening balance of your businesses cash on hand. Combine with the net of cash inflow and cash outflow to get your closing balance for that month. Below is a simplified structure of your cash flow forecast. This format will vary from business to business.
Jan Feb
Cash In 700
Loans 1000
Total In 1000 700 Cash Out
Materials 500 200
Drawings 200
Vehicle Running 100 50
Office rent 100 100
Insurance 200
Telephone 50 20
Total Out 950 570
Reconciliation
Opening Balance 0 50
Total In/Out 50 130
Closing Balance 50 180
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