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Cash flow projection templates

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Last editedNov 20202 min read

For businesses, cash is king, which is why cash flow management is so critical for successful companies. But to properly manage your company’s cash flow, you’ll need to effectively analyse future cash inflows and outflows. To do that, you’ll need to produce a cash flow projection.

Giving you a more comprehensive level of control over your finances, a small business cash flow projection template is an essential document for businesses of all shapes and sizes, whether you’re running a bleeding-edge start-up or a dominant market leader. Find out a little more about annual cash flow projection templates, their significance, and how to produce one for yourself, right here.

What is a cash flow projection template?

Used to conduct cash flow forecasting, a cash flow projection template shows how much money is expected to flow in and out of your business over a given period. Usually, small business cash flow projection templates are produced for a 12-month period. However, they may also be produced for longer stretches, i.e., 24 months, 10 years, etc. It should reflect your business’s likely expenses and revenue sources, giving you the means to plan and ensure that capital is available in case of an emergency.

Why is a small business cash flow projection template important?

Small business cash flow projection templates are essential for many reasons. Put simply, they give you an insight into the future state of your business’s cash flow. This can be immensely beneficial when it comes to planning business activities. For example, suppose your cash flow projection template indicates that you’re going to be dealing with restricted revenues in Q4. In that case, you can make immediate changes to reduce the potential impact, i.e., postponing expansion plans, launching a sales drive, or cutting overheads. Furthermore, annual cash flow projection templates are an essential document for any business attempting to secure financing.

How to make an annual cash flow projection template

To produce a small business cash flow projection template, you’ll need to include three components: a sales forecast, a profit and loss forecast, and a cash flow forecast. Here’s a little more information:

  1. Produce a sales forecast – First and foremost, you’ll need to create a sales forecast. Essentially, this is a prediction of how much you are expecting 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. Make a profit and loss forecast – Next, you should create a profit and loss forecast. This document combines your daily running costs with your firm’s income, providing an overview of your projected profits. Consider payment dates, the cost of sales, subscription costs, and non-cash costs (for example, depreciation of assets) when you’re producing the profit and loss forecast.

  3. Create a cash flow forecast – Finally, you’ll need to create the cash flow forecast, which provides an overview of the cash coming in and going out of your business. You can find these figures by referring to the sales forecast and profit and loss forecast you should have created in the previous steps.

And that, in a nutshell, is how you produce an annual cash flow projection template.

Free cash flow projection templates for a business plan

There are many different annual cash flow projection templates available online. For example, Float has produced a cash flow projection template for Google Sheets, which you can find here. There are also many examples of cash flow projection templates for Excel. Microsoft Office, Smartsheet, and Business Accounting Basics all offer free cash flow projection templates for Excel that you can download and try for yourself. If you don’t want – or don’t have time – to create the cash flow forecast from scratch, this can be an excellent option for small business owners.

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