A profitable business can still run out of money. A cash flow forecast makes the timing visible, so you see the squeeze coming while you can still do something about it.
Revenue you have recognised is not cash you have collected. A cost you have incurred is not a payment you have made. Debtors, creditors, stock, capital spending, loan repayments, tax, and dividends all move cash on a different schedule from the P&L. This is why a fast-growing, profitable business can be cash-negative: growth ties up money in unpaid invoices and stock long before it comes back.
A forward-looking projection of the money moving in and out of the business.
A cash flow forecast projects the money moving into and out of a business over a period, showing the opening cash, the net movement, and the closing cash for each interval. In plain terms, it projects your bank balance forward.
Most finance teams keep two horizons: a short-term operational forecast in weeks, for managing liquidity, and a longer-term forecast in months, linked to the budget, for planning.
The closing-balance row is the early-warning line.
Two ways to build one, answering different questions.
Build from expected receipts and payments, timed to when cash actually moves. Granular and timing-accurate, so it is the method for short-term operational forecasting.
Start from forecast profit, add back non-cash items such as depreciation, then adjust for working capital and for financing and investing. The method for the longer-term view, and how the cash flow statement in a 3-way budget is built.
Use the direct method for the next quarter's liquidity, and the indirect method for the annual plan that has to tie to your P&L and balance sheet.
For a short-term, direct-method forecast.
The closing balance line is the one that matters. It is where a dip four weeks out becomes visible.
The standard short-term cash tool.
Weekly intervals, a quarter ahead, built with the direct method, and rolled forward every week so it always looks 13 weeks out. Thirteen weeks is far enough to give you room to act and near enough to stay accurate.
The 13-week forecast is not about precision at week 13. It is about seeing the week-4 cash dip in time to do something about it, whether that is chasing a receipt, sequencing payments, or drawing on a facility.
The number of months you can keep operating at your current net outflow. For a funded or pre-profit business, this is the number the board watches.
Model a base case, a downside, and an upside. The single most common risk is receipts slipping, so stress-test collection timing, not just the amounts. A forecast where every customer pays on the day is not a forecast, it is a wish.
Building and rolling a forecast by hand every week, chasing expected collection dates and re-keying the bank balance, is the repetitive part of the reporting cycle.
Planir builds your cash flow forecast from your live accounting data, projects receipts and payments from your actual debtor and creditor positions, and links the longer-term view to your 3-way budget so cash flow, P&L, and balance sheet stay consistent. You review the assumptions, adjust the timing where you know better, and approve.
Planir is built for the planning and reporting cycles that funded, governed, and multi-entity businesses actually run.
Driver-based 3-way budgets and forecasts built from your live data, with every assumption documented and reviewable.
See budgeting and planningInvestor-grade 3-way projections with documented assumptions, ready for fundraising, M&A, and due diligence.
See pre-transaction preparationThe financial section of every monthly and quarterly investor update, generated from your live data.
See investor reportingConnect your accounting data and Planir builds the cash flow forecast from your live debtor and creditor positions, ready for you to review.