Cash Flow Forecast

Identify gaps in working capital with a cash flow forecast

A cash flow forecast is a prediction of how much cash will come in to and flow out of a business in a given future period – typically the next 12 months. It’s an important document that can help business owners manage cash flow and plan for the money needed to cover expenses and bills.

If, after preparing a cash flow forecast, you find you could do with some additional working capital to support business operations in New Zealand and beyond, talk to Prospa about a small business loan with a competitive interest rate that’s great for managing your cash flow.

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Cash Flow Forecast hacks

Cash flow forecasting is a simple tool that can provide valuable insight into your business. It can be as simple as a spreadsheet that lists income and costs by month and year. However, there are several things to remember when preparing a cash flow forecast for the first time.

NZ small businesses should:

    • Be realistic with predictions
    • Be accurate with income and costs
    • Include everything you can
    • Plan for different scenarios
    • Don’t forget fixed vs variable costs
    • Plan for seasonality


Frequently asked questions

A cash flow forecast looks at the cash going in and out of a business. It considers the cash on hand at the beginning at the period (opening balance), estimates the incoming cash for the next period (estimated income) and the expenses that will need to be paid (estimated expenses).

To calculate the cash flow the estimated expenses are subtracted from the estimated income – and added to the opening balance.

Like a sales forecast, a cash flow forecast can consider trends from previous years, however new factors like the addition of employees or new products should be taken into account.

A cash flow forecast can give a New Zealand business owner more confidence, more clarity and ultimately more peace of mind. If a shortfall is identified in the cash flow forecast, the business owner can avoid last minute panic and take steps to prepare in advance – like boosting the cash balance by seeking some additional working capital support in the form of a small business loan (rather than the worst case scenario of resorting to your personal credit card).

A cash flow forecast allows a business to predict cash shortfalls and surpluses – and manage overall cash flow. It helps NZ business owners compare business expenses and income between different periods, and lets them see if they need to make any adjustments, improvements or cut costs. With a cash flow forecast, a business can predict the financial effects on cash balance of hiring an employee or making other business changes.

Forecasting cash flow can help reveal any potential problem areas in your business. If you find a cash flow blip in your projections, you can do some more research to explore the issue and take steps to fix it in advance. Prospa helps NZ small businesses with fast applications on business loans and funding possible in 24 hours.

The cash flow forecast is an important part of the financial management of a business. It’s a valuable document which can help a business when it is applying for a small business loan. A cash flow forecast is like an early warning system that can alert business owners of any possible shortfalls in advance. It helps to make sure that the business has enough funds to pay suppliers and employees. It can also be a way to identify problems with customer payments.

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