Mark Osborne explains how to build a cash flow forecast that reveals what your bank balance will actually be. Start with your opening balance, then add when customers pay and subtract when you pay suppliers, mapping income statement items and accounting for cash expenses that don't show up on your P&L.
cash flow forecast. It's really easy, really simple actually. So you start with the starting balance of your bank account for any given periods. It could be a day, it could be a week or a month, and then you just list everything that's cash into your business. For example, a customer pays the invoice, and it's not the time that you send them the invoice, but it's actually when you expect them to pay. Right. And Then you list all the expenses, cash out. And again, it's not when you receive the invoice from your supplier, but it's when you're planning to pay for the invoice. And that's the basics. And you can go by your income statement and kind of take the lines and put them in the forecast. And then you just have to make sure there's a few other cash-out items that you can't find on the income statement.
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