The basics of cash-flow forecast forecasting
- Cash: To allow for future slippages, borrow or invest more than the forecast says you need.
- Sales: It takes time to build up. Give a modest estimate for the starting months.
- Purchases: Overstocking a bit is okay at start. It takes time find usage levels.
- Sales tax/VAT: Add the tax to all purchases and sales, other wise you may face huge tax outgoings in future.
- Employment costs: Give a cushion (allocate extra staff in the starting days) to allow for employee onboarding and training.
- Tax: Pay promptly and regularly. Allow for periodic payments instead of one time huge payouts.
- Marketing costs: Give a cushion here as well. Early-state marketing is also like experimenting.
- Loan repayments: Include EMIs (Estimated monthly installments) etc in your forecast.
- Slippage: Allow for late payments by your customers, and be ready to have extra cash at hand.