How to build a 12-month cash flow forecast (free template)

A cash flow forecast is the single most useful financial document a small business can keep. It answers the one question that sinks most companies: will I have enough money in the bank next month? In this guide we walk through building a rolling 12-month forecast, step by step.

Start with your opening balance — the actual cash in your account today. Then, for each month, list your expected income (invoices you will raise, sales you will make) and your expected outgoings (rent, salaries, software, stock, tax). The difference is your net cash flow, and adding it to your opening balance gives your closing balance, which becomes next month’s opening balance.

The most common mistake is being optimistic about when money arrives. Invoices are paid late, sales are seasonal, and tax bills land in lumps. Build in a buffer and forecast conservatively. The second mistake is forecasting once and never updating — a forecast is only useful if you revisit it monthly against what actually happened.

You do not need to build this from scratch. Our 12-Month Cash Flow Planner has all the formulas ready; you just type your numbers into the blue cells. If you are pre-launch, pair it with the Startup Costs & Funding Planner to work out how much runway you need, and for personal finances the Personal Finance Dashboard does the same for your household.