A guide to using templates to create cash flow projections

Read our introductory guide on how to create cash flow projections using templates.

Managing cash flow is one of the most critical processes for (small) businesses. Part of effectively managing your cash flow is understanding the future of inflows and outflows through solid cash flow projections. A business projection template can be an essential help in forecasting cash flow. It can give you better insight into your company's finances and improve your cash flow forecasting. This is why we've compiled this short guide to annual cash flow projection templates and how to use them.

Cash flow projection templates explained

These templates are simply designed to show how much money is expected to flow in and out of your business within a given time period. It can be used for cash flow management by standardizing the process of creating cash flow projections. Usually, the templates cover a 12-month period of future business finances, but there are some for longer periods of time. The template should reflect your business’s likely expenses and revenue sources, giving you an idea of your cash balance in the future and thereby helping to ensure that capital is available in case of an emergency.

Cash flow projection
Futrli Predict can help to automate your cash flow projections - it uses the Direct and Indirect methods of forecasting.

Why can these templates be important?

On a basic level, cash flow projection templates are important to cash flow management, because they provide you and your business with insight into your likely future cash flow. This allows you to avoid any cash flow problem and plan for the future. A business template can show you any future changes in revenue that are likely to occur - this allows you to react to that through eg launching a sales drive, or cutting overheads. These templates are also useful for companies trying to borrow money or get other funding.

How to create your business's cash flow projection template - improve your cash flow management

  1. Produce a sales forecast – Create a prediction of how much you are likely to sell throughout the given period (usually 12 months) Accurate predictions can be tricky, so think about trends from previous years, potential new contracts, and your business’s objectives, i.e., expanding into a new market.
  2. Create a profit and loss forecast – To create a profit and loss statement of future profits, combine your running costs with your income (taking into account payment dates, the cost of sales, subscription costs, and non-cash costs)
  3. Create a cash flow forecast – Create an overview of the cash coming in and going out of your business - this is done by referring to your sales forecast and profit and loss forecast

Where do I get free templates from?

There is a number of different sources you find annual cash flow projection templates online. Microsoft Office, Smartsheet, and Business Accounting Basics all offer free cash flow projection templates for Excel that you can download and try for yourself. This can be an excellent option for small business owners.

Annual budget spreadsheet
There is a number of different sources you find annual cash flow projection templates online.

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