What Is a Cash Flow Forecast? A Plain-English Guide with Examples
The short answer
A cash flow forecast is a projection of the cash a business expects to receive and pay out over a future period, usually 13 weeks or 12 months. It starts with today’s bank balance, adds expected receipts, subtracts expected payments, and shows the closing balance for each week or month, so you can spot shortfalls before they happen.
A cash flow forecast answers one question: how much money will be in the bank, and when? Profit tells you whether the business makes money over time. Cash flow tells you whether you can pay the bills next Friday.
How a cash flow forecast works
Every forecast, from a one-page spreadsheet to a lender’s 13-week model, uses the same four lines for each period:
| Line | What it means |
|---|---|
| Opening balance | Cash in the bank at the start of the period |
| Cash in (receipts) | Customer payments, loans, investment, refunds |
| Cash out (payments) | Payroll, rent, suppliers, tax, loan repayments |
| Closing balance | Opening balance + cash in − cash out |
The closing balance of one period becomes the opening balance of the next. That chain is what makes a forecast useful: one late customer payment in week 3 shows up as a lower balance in every week after it.
A simple example
A small agency starts March with $18,000 in the bank.
| March | April | May | |
|---|---|---|---|
| Opening balance | 18,000 | 14,500 | 9,200 |
| Client payments | 32,000 | 28,000 | 41,000 |
| Payroll | −24,000 | −24,000 | −24,000 |
| Rent and software | −6,500 | −6,300 | −6,300 |
| Quarterly tax | −5,000 | −3,000 | 0 |
| Closing balance | 14,500 | 9,200 | 19,900 |
The agency is profitable over the quarter, but April ends at $9,200, less than half a month’s payroll. Knowing this in February lets the owner chase invoices early or delay a purchase.
Cash flow forecast vs cash flow statement
A cash flow statement looks backwards and reports what happened. A cash flow forecast looks forward and predicts what will happen. You use last year’s statement, bank records and sales pipeline to build the forecast.
Weekly or monthly?
- Weekly (13-week): best when cash is tight, you pay staff weekly, or you are talking to a lender. See our 13-week cash flow forecast guide.
- Monthly (12-month): best for annual planning, budgeting and business plans.
Many businesses keep both: a weekly view for the next quarter and a monthly view for the year.
Why it matters
- You see shortfalls weeks ahead, while there is still time to act.
- You make hiring and purchasing decisions with evidence, not gut feel.
- Lenders and investors expect one. A credible forecast speeds up loan applications.
- You stop confusing profit with cash. Fast-growing businesses often run out of cash while profitable.
Start with a template
You don’t need accounting software to forecast. A good spreadsheet template handles the formulas so you only enter numbers.
If you want to test numbers first, try the free cash flow forecast calculator, or read how to make a cash flow forecast step by step.
Questions people ask
What are the three parts of a cash flow forecast?
Cash coming in (receipts), cash going out (payments) and the resulting balance (opening and closing balance for each period).
How far ahead should a cash flow forecast go?
Most small businesses forecast 13 weeks in weekly detail and 12 months in monthly detail. Business plans and loan applications often need a 3-year projection.
Is a cash flow forecast the same as a budget?
No. A budget sets spending and revenue targets, usually on a profit basis. A cash flow forecast predicts the timing of actual cash moving in and out of the bank.
Cite this guide
Your Name, CPA. “What Is a Cash Flow Forecast? A Plain-English Guide with Examples.” Cashflow Forecast Hub, updated September 25, 2026. https://cashflowforecast.openfollowup.com/guides/what-is-a-cash-flow-forecast