Before you can advise your clients on how to adapt to changing conditions, you need a clear picture of the current state of their business. A cash flow forecast helps you determine how long clients can maintain business operations, given their typical patterns of bringing in and spending money. You can then use the forecast as a planning tool to evaluate “what-if” scenarios, based on potential adjustments to revenue and expenses. Set a goal to create a three-month plan to keep your clients cash positive.
We created a forecasting spreadsheet for you to use. Make a copy of the Google Docs spreadsheet.
Before you start, make sure all transactions are reconciled and the books are clean. To put together the forecast, you’ll need the data from a few QuickBooks reports.
- Run a Profit and Loss report for the past three months to understand the average income and expenses for each month. For income, focus on the top sources of revenue. On the expense side, pay particular attention to payroll, rent, insurance, and marketing expenses.
- Run the Open Invoices report so you’ll be able to see anticipated sources of cash.
- Run the Unpaid Bills report to identify expected short-term cash outflows.
This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Australia Pty Ltd. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Australia Pty Ltd. does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.