The forecast that matters most.
WHY CASH RATHER THAN PROFIT
A profitable business can run out of cash.
Timing, not profitability, is what stops businesses.
WHAT TO FORECAST
Money in, by week or month Money out, by week or month The resulting balance
WHAT TO INCLUDE IN MONEY IN
Expected payments from customers, at realistic dates Not invoice dates, but likely payment dates
THAT DISTINCTION
The whole point. Late payers pay late in the forecast too.
WHAT TO INCLUDE IN MONEY OUT
Fixed costs Variable costs Tax and anything owed Planned purchases
WHAT HORIZON
Thirteen weeks is a common and useful period.
WHAT TO UPDATE
Weekly, in a tight period.
WHAT IT REVEALS
The week where the balance goes negative.
WHAT TO DO ABOUT THAT
Act early: chase receivables, delay discretionary spend, talk to suppliers.
WHAT TO RECORD
Actual against forecast, so accuracy improves.
