A cash flow forecast shows whether a new payment fits before anyone signs. This hub lists the steps, works a 13-week forecast for an invented auto glass shop, and names cash flow levers an owner controls.
How to Prepare a Cash Flow Forecast Before a Brigham City, UT Shop Takes On a Machine Payment
A cash flow forecast tracks money in and out by week, not profit by month. Six steps build one:
- Start from the bank balance on the first day, not from last month's profit.
- Enter each expected receipt in the week it should land, using how promptly each kind of customer has paid before.
- Enter fixed payments on their due dates: payroll, rent, loan and lease payments, insurance.
- Add costs that rise and fall with work, such as materials bought per job.
- Add the new machine payment from its first due date, and any down payment in the week it is paid.
- Find the week with the least cash and decide whether the business can carry that low point.
If the low point is too thin, the same sheet can be rerun with a later start date or a longer term.
A 13-Week Cash Flow Forecast, Worked Week by Week for an Invented Box Elder County, UT Auto Glass Shop
Illustration only, invented figures: an auto glass shop opens the quarter with $18,365 in the bank. Invented payroll of $7,445 falls in the odd-numbered weeks, 7 paydays in all. The invented glass-and-other column includes a $1,285 payment on a windshield calibration rig in weeks 4, 8 and 12.
| Week | Cash at start | Job receipts | Payroll | Glass and other costs | Closing cash |
|---|---|---|---|---|---|
| 1 | $18,365 | $9,850 | $7,445 | $5,960 | $14,810 |
| 2 | $14,810 | $11,240 | $0 | $6,310 | $19,740 |
| 3 | $19,740 | $8,970 | $7,445 | $4,880 | $16,385 |
| 4 | $16,385 | $12,410 | $0 | $6,740 | $22,055 |
| 5 | $22,055 | $10,380 | $7,445 | $5,415 | $19,575 |
| 6 | $19,575 | $9,120 | $0 | $6,125 | $22,570 |
| 7 | $22,570 | $11,760 | $7,445 | $4,990 | $21,895 |
| 8 | $21,895 | $12,940 | $0 | $7,180 | $27,655 |
| 9 | $27,655 | $8,640 | $7,445 | $5,730 | $23,120 |
| 10 | $23,120 | $10,920 | $0 | $6,045 | $27,995 |
| 11 | $27,995 | $11,580 | $7,445 | $5,280 | $26,850 |
| 12 | $26,850 | $9,760 | $0 | $7,335 | $29,275 |
| 13 | $29,275 | $12,150 | $7,445 | $5,860 | $28,120 |
In this invented forecast, week 1 closes with the least cash, $14,810, and the quarter ends at $28,120 after $139,720 of invented receipts. A payday week that follows a weak receipts week is the one to watch when a new payment is added.
How Can a Business Improve Cash Flow Before It Asks for Funding? Levers a Brigham City, UT Owner Controls
Some cash flow gaps close without any funding. Each of these levers is in the owner's hands:
- Invoice the day a job ends, not at the end of the month.
- Ask for a deposit on custom orders before buying their materials.
- Ask key suppliers for longer terms on repeat orders.
- Reorder less of the stock that sits on the shelf longest.
- Set a new machine's first payment after a large receivable is due.
When a gap remains after these, its size and timing point to working capital, a credit line or equipment financing. Posts on this blog work those routes for a plastics assembler's welder and pad printers, a foundation crew's forms and membrane and a line-boring kit priced three ways.
Where a New Payment Lands in the Forecast: A Box Elder County, UT Auto Repair Shop and a Dental Office
An auto repair shop paid at the counter sees receipts every day, so a new monthly payment lands in a week that also has income. Its forecast question is whether parts orders and payroll stack up in the same week as the payment. The auto repair post follows a head mill, an injector bench and radiator stock.
A dental office waits on claims after each visit, so its receipts trail its costs by weeks. Its forecast question is different: whether a new equipment payment falls before the claims for the month's visits are paid. Two forecasts, built the same way, answer the two questions. Dental and physician offices each have a post: air polishers and an obturation unit, and an endoscope tower, a UVB cabinet and IUD stock.
By Clayland Commercial Capital · Updated