Cash Flow Forecast Template: Free Excel & PDF Options

Cash flow forecasting is essential for all businesses looking to expand and evolve. On this page, we’ll provide various downloadable free cash flow forecast templates, including Excel, Word, and PDFs. Each template will help you track your income and expenses, allowing you to make more accurate predictions about your cash flow and keep your business on the right path.

What is a Cash Flow Forecast Template?

A cash flow forecast template is a document used to project a business's future cash inflows and outflows. This helps businesses to plan investments and ensure financial stability. 

Types of Cash Flow Forecast Templates

Weekly Cash Flow Forecast Template

A weekly cash flow forecast template helps businesses track cash flow on a regular basis, providing a clear overview of income and expenses each week. What’s more, it can help detect potential shortfalls. 

Monthly Cash Flow Forecast Template

Using a monthly cash flow forecast template doesn’t just track cash flow, it provides a range of benefits for businesses – especially when it comes to long-term planning. One benefit is that it allows companies to quickly identify trends in revenue and spending, improving decision-making and spotting areas of improvement. 

Another benefit is that is allows businesses to prepare for seasonal fluctuations or unexpected expenses that may arise, meaning there’s plenty of time to set aside reserves or arrange finances.

Excel vs. PDF Templates

If a business is interested in a cash flow forecast template, they must decide between two formats: Excel or PDF. While there are advantages of using both, what separates them? 

An Excel template is highly editable and can be customised to suit a business’s specific preferences. For businesses needing more advanced features like automated reporting or real-time collaboration, cloud-based tools such as QuickBooks Online Advanced combine Excel’s flexibility with added accessibility and scalability.

Comparatively, PDF templates are a fixed format and is a professional way of presenting and sharing work, making them ideal for producing reports. Plus, they come with a ‘read-only’ feature, which prevents anyone from accidentally making changes or unauthorised edits.

Who Needs a Cash Flow Forecast Template?

Small and Medium Businesses

Using a cash flow template is a simple yet powerful tool for small and medium businesses. It not only helps them anticipate financial challenges, but also manage expenses and plan for future investments. It’s crucial for all businesses looking to grow in their particular market. Typically, lenders and investors require a cash flow forecast to check a business’s financial health before deciding whether to approve funding or not.

Freelancers & Sole Traders

Freelancers and sole traders can effortlessly manage cash flow, track earnings, and anticipate any upcoming expenses. Moreover, if there are overdue invoices, freelancers can chase clients and monitor payments. Another advantage is that it allows freelancers to budget for any tools, software, and taxes, ensuring they don’t fall short each month.

How to Use a Cash Flow Forecast Template

1. Set the Time Period: 

Decide whether the forecast will cover a weekly, monthly, or quarterly period based on your business needs. Short-term forecasts help with day-to-day cash management, while long-term forecasts help with strategic planning.

2. Identify Income Sources:

List all potential income sources such as sales, client payments, investments, or loans. Then estimate the income amount during each forecast period. 

3. List Fixed and Variable Expenses:

Include fixed expenses including rent, salaries, insurance, and loan payments for instance. Variable expenses means costs of utilities, raw materials, and commissions. For each category, enter the expected amounts over the forecast period. 

4. Calculate Net Cash Flow:

To calculate the net cash flow you’ll need to subtract total expenses from the total income. A positive cash flow means more money is being made than spent. Whereas a negative cash flow means you may need to cut down on costs.

5. Review and Adjust Projections:

Finally, double check the projections made are realistic and accurate by checking historical data or trends, industry changes, and unexpected expenses, then make the necessary adjustments. 

Tracking Income & Expenses

Tracking expenses and categorising income expenses is crucial for financial management. Ultimately, it allows businesses to clearly identify where money is going and where it’s coming from. Plus, it gives businesses the opportunity to improve budgeting, giving them more control over their finances. 

Advantages of Using a Cash Flow Forecast Template

Financial Planning & Control

Cash flow templates help businesses control finances in a variety of ways. Firstly, it shows a clear overview of cash flow, giving them the chance to plan ahead. Secondly, it helps to identify, set, and execute realistic budgets so they can prioritise spending and allocate funds. Finally, it’s an opportunity for a company to plan for growth and investments. 

Preventing Cash Shortages

A cash flow template is also effective at anticipating and identifying cash shortages. By projecting cash flows and outflows, businesses can spot where finances might run low and make changes before it becomes an issue. It also ensures that all client payments and invoices are made on time, meaning businesses can chase late payments and avoid missing payments.

Disadvantages of Using a Cash Flow Forecast Template

Risk of Inaccuracy

One of the few disadvantages of using a cash flow forecast template is that there is a risk of it becoming inaccurate if it isn’t updated regularly. That means the forecast may be misleading, which could lead to inaccurate projections and poor financial decisions.

Complexity for Larger Businesses

Larger businesses may find basic templates too simplistic for their specific requirements. As companies grow, financial operations become more complex which means a basic spreadsheet won’t be sufficient. For instance, larger businesses often deal with multiple suppliers and revenue streams, meaning a manual template would be time consuming. 

Best Practices for Maintaining an Accurate Cash Flow Forecast

Regular Updates

It’s crucial for businesses of all sizes to regularly update the template to produce accurate forecasting. Frequent updates mean that the forecast aligns with real income and expenses, providing businesses with an accurate overview of cash flow. Plus, an up-to-date template allows business owners to make financial decisions on whether to invest or cut costs. It also helps them set realistic budgets, plan for growth, and avoid financial surprises. 

Realistic Projections

Businesses should always look to produce realistic estimates based on historical data. Overly optimistic or inaccurate estimates can lead to poor financial decisions. That’s why businesses should always review previous financial records and find average income patterns as well as trends which should make it easier to spot any outliers. 

Businesses should also consider the impact seasons make on cash flow, such as peak period sales or when during a time period when a business is typically quiet. 

Common Mistakes to Avoid When Using a Cash Flow Template

Not Tracking All Expenses

One of the most common mistakes businesses make is failing to include all types of expenses in their forecast, both fixed and variable. Fixed expenses account for expenses that typically remain the same in price and frequency, this includes rent, salary, or software subscriptions. Variable expenses are those that change in cost and occurrence such as utility bills, raw materials or equipment, labour, and commissions. 

It's essential for businesses to track all expenses to gain a true financial picture, avoid underestimating costs, and help identify cost-saving opportunities.

Using Outdated Data

Another common mistake is when businesses rely on outdated data. This can skew the accuracy of forecasts and lead to poor financial decisions in the long run. The old date does not reflect the current financial changes of a company, from income to market conditions. Unreliable forecasts mean companies miss early signs of cash shortages or decline in revenue which could cause financial strain in the future.

Cash Flow Forecast Template Example

Cash Flow Forecast Template vs. Budgeting Template

How to Automate a Cash Flow Forecast Template

QuickBooks automates the cash flow forecast process to provide accurate projections and real-time tracking. With features such as the Cash Flow Planner and customised reports, you can take control of your financial health anytime, anywhere.