Running a small business is a balancing act. You’re managing clients, employees, and the day-to-day operations while trying to keep an eye on the financial health of your company. One crucial aspect of financial management that often gets overlooked is cash flow forecasting.

A tool that can make the difference between success and financial struggle.

At Curve Accountancy, we work closely with small business owners in Crawley to help them gain control over their finances. One of the key services we offer in our Accountancy Support Workshops is cash flow forecasting, ensuring businesses are prepared for what’s ahead.

What is Cash Flow Forecasting?

Cash flow forecasting is the process of predicting the money coming into and going out of your business over a set period. This forecast allows you to anticipate shortfalls, plan for growth, and avoid unnecessary financial stress.

For small businesses, where margins are often tight, cash flow forecasting is not just important.

It’s essential. 

Without it, you could find yourself in a situation where you can’t pay suppliers, staff, or even yourself, despite having profitable months on paper.

Why is Cash Flow Forecasting Important?

1. Prevents Cash Shortages

Even profitable businesses can run into trouble if they don’t have enough cash on hand to cover expenses. A forecast helps you anticipate dips in cash flow and take action before they become a crisis.

2. Improves Decision Making

Should you invest in new equipment? Hire another employee? Expand your marketing budget? Cash flow forecasts provide data-backed insights to help you make smart financial decisions.

3. Gives You Better Control Over Business Growth

Growth requires investment. A clear forecast ensures that your business expands sustainably rather than running out of cash in a crucial moment.

4. Helps Secure Funding

If you need a business loan or investment, lenders will want to see that you have a solid financial plan. A detailed cash flow forecast strengthens your case and demonstrates that your business is well-managed.

5. Reduces Financial Stress

One of the biggest challenges for small business owners is financial uncertainty. A cash flow forecast gives you peace of mind by showing what’s ahead and allowing you to prepare accordingly.

How to Create a Cash Flow Forecast

Step 1: Identify Your Income Sources

Start by listing all the money coming into your business. This may include:

• Sales revenue
• Grants or funding
• Investments
• Tax refunds or rebates

Step 2: Track Your Fixed and Variable Expenses

Next, list your outgoings, such as:

• Rent and utilities
• Payroll and contractor fees
• Marketing and advertising costs
• Loan repayments
• Taxes
• Inventory and stock purchases

Understanding these expenses is crucial for identifying trends and spotting potential cash flow issues before they arise.

Step 3: Establish a Forecast Period

Decide whether you need a short-term (weekly/monthly) or long-term (quarterly/yearly) forecast. Many small businesses start with a 12-month cash flow plan but review it on a rolling basis.

Step 4: Calculate Your Net Cash Flow

Subtract your expenses from your income for each period to see whether you’ll have a surplus or deficit. If there’s a potential shortfall, now is the time to plan how to bridge the gap.

Step 5: Monitor and Update Regularly

A cash flow forecast isn’t a one-time exercise. Things change, so update your forecast regularly and adjust your business strategy accordingly.

When Should You Do a Cash Flow Forecast?

While cash flow forecasting should be ongoing, there are key times when it’s especially important:

• Before Making Major Business Decisions – If you’re considering a big investment, a forecast helps ensure it won’t put you in financial trouble.
• During Seasonal Fluctuations – If your business experiences busy and slow periods, forecasting helps you navigate lean months.
• When Applying for Funding – Banks and investors will want to see a clear picture of your financial future.
• If You’re Experiencing Cash Flow Issues – If money is tight, a forecast can help you pinpoint the cause and develop a solution.

What to Do if Your Forecast Predicts a Cash Flow Issue

If your forecast shows potential problems, don’t panic—there are steps you can take:

• Reduce unnecessary expenses – Audit your spending and create cost efficiencies where possible.
• Speed up receivables – Encourage customers to pay faster by offering early payment discounts or automating invoicing.
• Negotiate with suppliers – See if you can extend payment terms or secure better rates.
• Seek additional funding – If you foresee cash shortages, consider short-term financing or business loans.

Get Expert Help with Cash Flow Forecasting

If you’re feeling overwhelmed by cash flow forecasting, you’re not alone. Many small business owners struggle with financial planning while juggling daily operations. That’s where Curve Accountancy comes in.

We offer Accountancy Support Workshops designed specifically for small businesses in Crawley. Led by Chris and our expert team, these workshops help you:

• Create accurate cash flow forecasts
• Understand financial trends in your business
• Develop strategies to improve cash flow
• Get hands-on financial planning support

By attending one of our workshops, you’ll gain practical insights that will help you take control of your business finances and plan for long-term success.

Book Your Accountancy Support Workshop Today

Don’t let cash flow worries hold your business back. Sign up for our Accountancy Support Workshops and learn how to forecast with confidence.

📞 Call Curve Accountancy today to book your spot.