REPORT ON PROGRESS
Cash Flow Forecasting
A horizontal cash flow forecast gives you a multi-month view of your business finances. Here’s what it involves and why it’s worth doing at this stage.
How to Build a Rolling Cash Flow Forecast for Your Business
At this stage, the simple vertical cash flow from Stage 2 isn’t enough. You need a rolling, multi-period forecast that gives you a clear picture of where your cash is heading over the next six to twelve months.
What a horizontal cash flow looks like
A horizontal cash flow has all your income and expense categories down the side, and months across the top. At the bottom, it calculates each month’s net movement in cash and gives you a projected closing balance.
This is a more complex report to build and maintain, and I’d recommend engaging an accountant to set it up properly. The benefit is that you can project much further into the future, factor in seasonal patterns, and plan around upcoming tax payments before they arrive.
Once it’s set up, it gets updated each month alongside your other financial reports. Over time, it becomes one of the most valuable tools in your business — not because it’s always accurate, but because it forces you to think ahead.