Most people assume that you can tell how successful a company is based on their cash flow—they’re most probably correct. The circular flow of money within the veins of a company is what keeps business alive and competitive within the market of the 21st century. However, like gusts of wind that portray the pattern of a cyclone, these cash flows are utilized to forecast a business’s future.  

What is a Cash Flow Forecast?

Sit back, relax, and think about this: what defines a successful business in this modern day and age? Bartering of goods has been pushed out of the way by a new system. This system involves setting an amount of currency and pricing goods and services based around these set mediums of exchange. Going back to the corporations of today, what defines a prosperous industry from a crash-and-burn is their ability to identify consistencies within their profits and losses. This is what’s called a cash flow: a systematic pattern of revenue and expenditure.

However, identifying your business’ cash flow isn’t a guarantee for success. The other part of the tale is the utilization of this knowledge to prepare your business for the future. Cash flow forecasts function in the same way as weather forecasts: if it looks clear and good, it’s best to venture out and explore new opportunities and investments. If it looks cloudy, unsure, and grey, then it’s best to hunker down, take inventory of your stocks, and prepare for the worst.

Weather The Storm

What does China, The Philippines, Japan, Mexico, and the United States have in common? They’re 5 of the 10 countries most likely to be hit by a cyclone. With that said, these places are prone to having winds as fast as 117 kilometers per hour and heavy rainfall barrel through them like a bull through a china shop, so how do the locals prepare for these winds and high water? The answer lies in the question itself. As soon as forecasts of the impending gales show up on news channels, people start storm-proofing their homes. Though money has a few water-proof tendencies, it’s still prone to being swept away by the winds of ill-expenditure. So as a business person, it’s your responsibility to watch the forecasts and prepare to weather the storm.

10+ Cash Flow Forecast Samples in PDF | DOC

From annual updates and financial calculators to cash flow statements, quotations, and analyses, here are a few free samples you can use to draft your document.

1. Yearly Cash Flow Forecast Example

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2. Cash Flow Forecast Sample

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3. Cash Flow Forecast Example

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4. Cash Flow Forecasting Module Template

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5. Use of Cash Flow Forecasts in Treasury Operations

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6. General Cash Flow Forecast Sample

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7. 12 Months Cash Flow Statement Template

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8. Cash Flow Forecasting Model Sample

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9. Simple Cash Flow Forecast Template

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10. Cash Flow Forecast in DOC

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11. Formal Cash Flow Forecast Template

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How to Forecast Cash Flows

Cash flows are a well-known concept among business-oriented individuals. Despite that, however, very few people know how to effectively utilize them to increase their enterprise’s value. If you want to take your company to the next level, you’ll need to learn how to forecast your future profit and loss using cash flows—luckily for you, here are a few general tips you can understand and apply soon.

1. Analyze Previous Data

Having a yearly record of every circumstance that affects your company provides you with information you can use as a reference. Running a data analysis on these give you reliable info for running diagnostics on your money-management system. Keeping records also allows you to look back at past problems and how they were dealt with should they reoccur.

2. Find A Reliable Market Trend

If you’ve noticed, it’s easier to sell goods and services in certain parts of the year such as holidays and summer time. These are called market trends, and they are directly connected to cash flow as these trade patterns heavily influence the customer’s want to spend. As such, finding a reliable market trend you can base your cash flow on allows you to predict optimal seasons of the year for revenue generation.

3. Address Uncertain Areas

In the same fashion as unpredictable storms, your cash flow forecast will have grey patches and areas of uncertainty. To address this, it’s best to have a strategic action plan in place for any situation that may occur. As vague as this may sound, the only way to solve an unpredicability is with preparedness—expect the unexpected as it were.

4. Understand Your Limits

Cash flow forecasts, like any other plan for the future, has its limits. They only go so far, so don’t expect your plan to cover every aspect of your business. Finalities should be covered by you, and you should be quick on your feet to run from the storm that’ll empty your bank accounts.

 

The difference between millions of dollars in revenue from bankruptcy is the entrepreneur’s ability to utilize cash flows. From strategizing your selling patterns around them to forecasting their effect on your business, cash flows are an integral concept to understand in the field of business and franchise. After all, the only storm that can truly destroy your business is the storm you don’t prepare for.

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