Jonathan Vowles Chartered Accountants

01234 752 566


Cashflow Forecasts: The Single Most Important Financial Tool

Every business needs one ...

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We all know that cash is king. Whether you have spare cash or are struggling to pay your bills each month, a weekly or monthly cashflow forecast is probably the most important financial tool you can have in any business ...

If you create a cashflow forecast, you need to keep it regularly updated!

If you create a cashflow forecast, you need to keep it regularly updated!

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If you are struggling with cashflow then it is obviously very important, but every business needs one! If your business is struggling with cash flow then you need to know how much you need each week across the next month or two to cover bills, pay your wages and stay afloat.

If your business is in a less difficult position then it helps to pinpoint the ideal time to invest in new employees or invest in growth, or whether you should finance an asset purchase or buy outright.

Preparing a forecast that covers the next three months is often the best time frame to consider. Particularly as one of the benefits of a cashflow forecast is that future view. That heads-up that a pinch-point is coming down the line so that you have forewarning and can do something about it before it happens. Just the next few weeks doesn't give you any time to react and looking too far forward brings in too much guesswork and effort for no reward.

"Obviously, a cashflow forecast is not an exact science, it is predicting the future after all!"

Your workings should be spot on over the next week or two, but will be mainly guesswork for weeks 11 and 12 of your 3-month cashflow forecast. But it is not meant to be exact, it is simply a guide to the future. A useful way of predicting the peaks and troughs of your finances.

Once you have created your cashflow forecast it needs to be regularly maintained and you should update it at least once a week. And remember to make a point of reviewing it and thinking about what it means.

Until next time ...


Would you like to know more?

If you want help with a cashflow forecast then let me know, either to do one for you or to help you set up one of your own. Call me on 01234 752 566, leave a comment below or click here to ping over an email and let's see how I can help you.

About Jonathan Vowles ...


I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.

My eclectic interests in growing and developing business span a number of areas, which can be summarised as strategic business advice and tax saving advice.

I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.

I relax by reading fiction and by getting away from the office in a campervan.


01234 752 566