What Is a Cash-Flow Forecast — and How Do I Build One?

A cash-flow forecast estimates the cash coming into your business and the cash going out, period by period, so you can see your projected bank balance before it happens — not after.

1. Choose your period. Weekly is useful for a tight cash position; monthly suits a more stable business. Most forecasts run 3–12 months ahead.

2. List your cash incoming. Sales you expect to actually collect — not invoice, collect. Use last year's figures, known seasonal patterns and confirmed contracts as your guide.

3. List your cash outgoing. Every payment the business expects to make — rent, wages, loan repayments, GST and tax, stock, subscriptions, and anything irregular like an annual insurance renewal or a quarterly BAS payment.

4. Calculate the net movement. Total incoming minus total outgoing for each period.

5. Carry the balance forward. Add each period's net movement to the opening balance to get a running projected cash position.

6. Check it against reality. Once the period has passed, compare your estimate to what actually happened — this is the step business.gov.au specifically flags as the most important, because it's what makes your next forecast more accurate.

• Fortnightly payroll traps. If you pay staff fortnightly, some months will have three pay runs instead of two — an easy detail to miss.

• Irregular but certain costs. Annual registrations, insurance renewals and BAS payments are easy to forget because they don't happen every month.

• Seasonal swings. If your business has a quiet season, your forecast should show it — not assume every month looks like your best one.

• Collection timing, not invoice timing. If customers typically pay 30 days after invoicing, your forecast should reflect when the cash actually lands, not when you issued the invoice.

Seeing a shortfall three months out, rather than discovering it the week it happens, gives you real options: chase collections earlier, delay a discretionary purchase, adjust pricing, arrange finance in advance on your terms rather than in a scramble, or simply set cash aside in the stronger months to cover the leaner ones ahead.

• Do I have a rolling forecast at least three months ahead, updated regularly?

• Have I based cash incoming on when customers actually pay, not when I invoice?

• Have I included irregular costs — annual renewals, BAS, extra pay runs — not just the predictable monthly ones?

• Am I comparing my forecast to what actually happened, and adjusting?

The Australian Government provides a free cash-flow statement template that can also be used to build a forecast.

business.gov.au — Set up a cash flow statement https://business.gov.au/finance/cash-flow/set-up-a-cash-flow-statement

• you've never built a forecast and want one set up properly the first time;

• your business has meaningful seasonality and you want the forecast to reflect it accurately;

• you're planning a major purchase, hire or expansion and want to stress-test the cash impact first; or

• you want a forecast built alongside your actual accounting data, rather than estimated from memory.

→ My Business Is Making a Profit — So Why Is There No Money in the Bank?

→ How Much Cash Should My Business Keep in Reserve?

→ How Can I Improve My Business Cash Flow Without Simply Cutting Costs?

SKC Accounting | Knowledge Centre | Knowledge Guide 015

Last reviewed: August 2026

General information only. This guide does not take into account your individual circumstances and is not a substitute for professional accounting, taxation, legal or financial advice.