Cash Flow Forecasts This shows the WHEN of cash coming in and cash going out during a certain month and year.

Cash Flow Forecasts They serve as a warning – show when expenditures are running out of control or sales targets are not being met.

Cash Flow Forecasts It helps the business estimate how much they can afford to spend in a iven month without unexpectedly running out of cash. However, it only uses ESTIMATED figures. These are placed with REAL figures as the financial year progresses.

Cash Flow Forecasts - Income This is the money that goes into the bank account through sales, rents payable to you, grants etc.

Cash Flow Forecasts - Expenditure This is the money that goes out of the bank account through advertising costs, equipment hire, staff costs, national insurance payments, insurance, petrol, specialist clothing etc.

Cash Flow Forecasts – Identifies problem times of the year The cash flow forecast will idnitfy ‘difficult’ months – i.e. when you have not got enough cash in the bank account to pay bills.

Cash Flow Forecasts – What could you do when not enough cash? Negotiate an overdraft (will be charged interest). Review the pricing policy – may reduce price but decrease its desirability, or increase price and reduce demand. Re-negotiate terms – may contact creditor and change payment terms. Think about costs – some purchases may be put off or cheaper options bought Think about a bank loan if problem may persist (will be charged interest on top of the amount borrowed). Reconsider purchase of fixed assets.