Most of the SMEs we work with know how much they have in the bank today. Few know how much they will have 45 days from now. That gap is what separates a company that decides with numbers from one that decides by its bank balance and reacts late, once it tightens.
A 90-day cash flow forecast does not require management software or a full-time finance director. It requires three lists that already exist inside the company, usually scattered across different places, and a simple spreadsheet.
What to gather before opening the spreadsheet
Three sources, all already in the building:
- Accounts receivable, with the real due date of every open invoice: not the date written in the contract, the date that client actually tends to pay.
- Accounts payable, including suppliers, rent, leasing and credit, also with real dates.
- The tax and payroll calendar: VAT, withholding tax, social security and salaries. These are the most predictable outflows there are, and the ones most often left out of the count.
How to lay out the columns
One row per week, thirteen weeks ahead. Five blocks of figures per row: opening balance, expected inflows, expected outflows, closing balance, and a notes column for whatever is uncertain, such as a client who is always late or a supplier whose terms are being renegotiated.
One week's closing balance is the next week's opening balance. That forces the sheet to stay consistent with itself, and it is the first error that tends to surface when someone builds this for the first time: weeks that do not line up.
The three most common mistakes
- Mixing forecast with hope. A client who is systematically 20 days late belongs in the forecast with that delay, not with the contractual term.
- Forgetting VAT and social security. They are the largest and most predictable outflows, and the ones most often missing when the forecast is put together in a hurry.
- Not updating it every week. A forecast built once and never revisited is worth less than no forecast at all. It gives false confidence.
When this stops fitting in a spreadsheet
With one client and one partner, a spreadsheet is enough. With ten to fifty people, several bank accounts and an invoice volume that changes every week, keeping this current consumes hours that nobody usually has to spare. That is exactly the point where the forecast stops being updated and decisions go back to being made off the bank balance.