Operating at home
tracking the financial troughs and peaks
Cash flow forecast
A cash flow forecast (or view a completed example) is a summary of expected monthly earnings and costs in your business, usually for a period of 12 months. By inserting figures from your records you can track, on paper, your financial peaks and troughs and develop strategies for managing them. A cash flow forecast is concerned with liquidity and solvency of the business, rather than its profitability. Profitability on the other hand is a measure of the income earned, less the expenses incurred in earning the income, irrespective of when the cash is received or paid. Cash flow forecasts are intended to indicate when transactions will impact on your bank account balance, so the payment of expenses should be shown in the month the payment will be made.
If the business is registered for GST, the collection of GST and the payment
of GST to the Australian Taxation Office (ATO) should be included in the
cash flow forecast.
Next: taking your service or products to the customer
