How to prepare a cash flow forecast
A cash flow forecast estimates when cash enters and leaves your business so leadership can protect liquidity, avoid shortfalls, and deploy surplus cash with confidence. This guide walks through a practical, step-by-step process using a rolling 13-period model with realistic example data.
What is a cash flow forecast and why is it important?
A cash flow forecast is a forward-looking estimate of expected cash receipts and payments over a defined period. The core goal is liquidity planning: knowing whether you will have enough cash to meet payroll, vendor obligations, taxes, debt service, and operating commitments.
It is valuable because it converts uncertainty into an actionable operating view. Teams can spot potential gaps early, rebalance payment timing, and compare forecasted results against actual outcomes to improve accuracy over time.
Components of a cash flow forecast
Most operational cash flow forecasts are built from a few core components. Clear definitions make your model easier to maintain and audit.
Opening balance: cash available at the start of the period.
Inflows: expected cash receipts by source (for example, customer collections and other incoming cash).
Total inflows: the sum of all inflow categories for the period.
Outflows: expected cash disbursements by category (payroll, rent, vendors, taxes, insurance, and similar obligations).
Total outflows: the sum of all outflow categories for the period.
Closing balance: ending cash for the period, calculated as opening balance + total inflows - total outflows.
Types of cash flow forecasts
Short Term: daily or weekly views for immediate liquidity and payments.
Medium Term: rolling 13-week or quarterly views for operating control and working capital management.
Long Term: multi-month or annual views for strategic planning, capital deployment, and funding strategy.
Mixed Period: a hybrid structure (for example, weekly in the near term and monthly later) to keep detail where it matters most.
How to prepare a cash flow forecast step by step
The model below uses one account for simplicity and a rolling 13-period horizon (weeks and months). In production, teams usually run this across multiple accounts and legal entities.
Step 1: Choose a forecast horizon aligned to your decision cycle.
Choose your forecast time frame
Pick the horizon based on your objective. For this walkthrough, we use a rolling 13-period model.
Step 2: Gather source data from statements and internal systems and calculate total inflows and total outflows by period.
Opening balance
Starting cash available in one account at the beginning of each period.
| W1 | W2 | W3 | W4 | W5 | W6 | W7 | W8 | W9 | W10 | W11 | W12 | W13 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Opening Balance | 2,500,000 | 2,759,000 | 3,139,000 | 3,364,000 | 3,664,000 | 3,981,000 | 4,199,000 | 4,583,000 | 5,003,000 | 6,736,000 | 8,704,000 | 10,808,000 | 12,703,000 |
Forecasted collections and incoming cash categories for a mid-sized company.
| Inflow category | W1 | W2 | W3 | W4 | W5 | W6 | W7 | W8 | W9 | W10 | W11 | W12 | W13 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Product sales collections | 850,000 | 910,000 | 940,000 | 920,000 | 980,000 | 1,030,000 | 990,000 | 1,070,000 | 4,350,000 | 4,480,000 | 4,620,000 | 4,750,000 | 4,890,000 |
| Service revenue collections | 210,000 | 225,000 | 220,000 | 235,000 | 240,000 | 250,000 | 255,000 | 260,000 | 1,080,000 | 1,110,000 | 1,140,000 | 1,180,000 | 1,210,000 |
| Accounts receivable recoveries | 145,000 | 120,000 | 165,000 | 110,000 | 140,000 | 155,000 | 135,000 | 150,000 | 620,000 | 640,000 | 660,000 | 680,000 | 700,000 |
| Interest income | 18,000 | 17,000 | 19,000 | 16,000 | 18,000 | 21,000 | 20,000 | 21,000 | 82,000 | 85,000 | 88,000 | 90,000 | 93,000 |
| VAT/Sales tax refunds | 0 | 0 | 42,000 | 0 | 0 | 50,000 | 0 | 0 | 125,000 | 0 | 0 | 132,000 | 0 |
| Intercompany reimbursement | 68,000 | 0 | 0 | 72,000 | 0 | 0 | 75,000 | 0 | 210,000 | 0 | 0 | 215,000 | 0 |
| Short-term facility draw | 0 | 125,000 | 0 | 0 | 0 | 0 | 0 | 0 | 180,000 | 0 | 0 | 0 | 0 |
| Other operating inflows | 55,000 | 48,000 | 53,000 | 52,000 | 56,000 | 58,000 | 54,000 | 60,000 | 230,000 | 240,000 | 250,000 | 255,000 | 265,000 |
| Total inflows | 1,346,000 | 1,445,000 | 1,439,000 | 1,405,000 | 1,434,000 | 1,564,000 | 1,529,000 | 1,561,000 | 6,877,000 | 6,555,000 | 6,758,000 | 7,302,000 | 7,158,000 |
Planned disbursements by category, including payroll, vendors, rent, tax, and recurring operating costs.
| Outflow category | W1 | W2 | W3 | W4 | W5 | W6 | W7 | W8 | W9 | W10 | W11 | W12 | W13 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Salaries and wages | 420,000 | 420,000 | 420,000 | 420,000 | 430,000 | 430,000 | 430,000 | 430,000 | 1,720,000 | 1,740,000 | 1,760,000 | 1,780,000 | 1,800,000 |
| Rent for office space | 95,000 | 95,000 | 95,000 | 95,000 | 97,000 | 97,000 | 97,000 | 97,000 | 390,000 | 392,000 | 394,000 | 396,000 | 398,000 |
| Vendor expenses | 260,000 | 275,000 | 250,000 | 280,000 | 295,000 | 300,000 | 285,000 | 305,000 | 1,160,000 | 1,190,000 | 1,210,000 | 1,240,000 | 1,260,000 |
| Insurance costs | 28,000 | 0 | 0 | 28,000 | 0 | 0 | 28,000 | 0 | 84,000 | 0 | 0 | 86,000 | 0 |
| Income tax payments | 0 | 0 | 180,000 | 0 | 0 | 220,000 | 0 | 0 | 550,000 | 0 | 0 | 590,000 | 0 |
| Debt service and interest | 105,000 | 105,000 | 105,000 | 105,000 | 110,000 | 110,000 | 110,000 | 110,000 | 440,000 | 445,000 | 450,000 | 455,000 | 460,000 |
| Utilities and IT subscriptions | 64,000 | 62,000 | 66,000 | 65,000 | 67,000 | 68,000 | 69,000 | 70,000 | 280,000 | 285,000 | 290,000 | 295,000 | 300,000 |
| Marketing and sales programs | 115,000 | 108,000 | 98,000 | 112,000 | 118,000 | 121,000 | 126,000 | 129,000 | 520,000 | 535,000 | 550,000 | 565,000 | 580,000 |
| Total outflows | 1,087,000 | 1,065,000 | 1,214,000 | 1,105,000 | 1,117,000 | 1,346,000 | 1,145,000 | 1,141,000 | 5,144,000 | 4,587,000 | 4,654,000 | 5,407,000 | 4,798,000 |
Step 3: Derive closing balances and roll each period forward.
Closing balance
Closing balance = opening balance + total inflows - total outflows. Each period drives the next opening balance.
| Line item | W1 | W2 | W3 | W4 | W5 | W6 | W7 | W8 | W9 | W10 | W11 | W12 | W13 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Closing Balance | 2,759,000 | 3,139,000 | 3,364,000 | 3,664,000 | 3,981,000 | 4,199,000 | 4,583,000 | 5,003,000 | 6,736,000 | 8,704,000 | 10,808,000 | 12,703,000 | 15,063,000 |
Put together all your components and get your full view of your cash flow forecast.
Full 13-period cash flow forecast view
Combined dashboard view with editable inflow and outflow amounts. Closing balances update automatically.
Editable forecast cells highlight on hover. Tap or click any forecast value to edit.
| Line item | W1 | W2 | W3 | W4 | W5 | W6 | W7 | W8 | W9 | W10 | W11 | W12 | W13 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Opening balance | 2,500,000 | 2,759,000 | 3,139,000 | 3,364,000 | 3,664,000 | 3,981,000 | 4,199,000 | 4,583,000 | 5,003,000 | 6,736,000 | 8,704,000 | 10,808,000 | 12,703,000 |
| Total inflows | 1,346,000 | 1,445,000 | 1,439,000 | 1,405,000 | 1,434,000 | 1,564,000 | 1,529,000 | 1,561,000 | 6,877,000 | 6,555,000 | 6,758,000 | 7,302,000 | 7,158,000 |
| Total outflows | 1,087,000 | 1,065,000 | 1,214,000 | 1,105,000 | 1,117,000 | 1,346,000 | 1,145,000 | 1,141,000 | 5,144,000 | 4,587,000 | 4,654,000 | 5,407,000 | 4,798,000 |
| Closing balance | 2,759,000 | 3,139,000 | 3,364,000 | 3,664,000 | 3,981,000 | 4,199,000 | 4,583,000 | 5,003,000 | 6,736,000 | 8,704,000 | 10,808,000 | 12,703,000 | 15,063,000 |
Include scenarios, not just one answer
Forecasts should include at least a base case, upside case, and downside case. This gives finance and treasury teams a better view of liquidity risk if customer receipts slow, costs rise, or one-time payments occur earlier than expected.
Scenario planning helps convert forecast variance into decisions: when to borrow, when to preserve cash, and when excess liquidity can be safely deployed.
Scale forecasting with Treasury Suite
Treasury Suite forecasting supports multiple forecast models, real-time variance tracking, and flexible horizons across daily, weekly, and monthly intervals. Teams can include all accounts for a consolidated and account-level view of liquidity.
FlowSense AI powers intelligent predictions through machine learning and pattern recognition to improve forecast quality over time. Teams also get multi-account breakdowns, inflow and outflow tracking, international remittance analysis, visual trend charts, multi-period comparisons, and dedicated balance and transaction tabs.
Explore the full product capabilities on our forecasting solution page or review how treasury workflows connect in what is treasury in finance.