Cash flow forecast

A cash forecast starts with the opening balance, adds expected receipts and deducts payments to estimate closing cash before and after financing. It uses the dates when money is expected to move, not merely when sales or expenses are recognised. Include credit terms, tax, capital spending, debt repayments and other material cash flows. Separate assumptions from committed amounts and test uncertain timing. A forecast identifies possible shortfalls early enough to arrange funding or change operations. It is different from a historical statement of cash flows and can be prepared at daily, weekly or monthly intervals.