Plan your monthly income and expenses, track your running balance, and spot potential cash shortfalls before they happen.
This tool helps UK businesses build a 12-month cash flow forecast by entering projected monthly income and expenses. It shows your running cash balance, identifies months where you may face a shortfall, and helps you plan ahead.
Note: Cash flow is distinct from profit — a profitable business can still run out of cash. Most accounting software (Xero, QuickBooks, FreeAgent) can generate cash flow forecasts automatically from your live data.
A healthy cash flow buffer is typically 3–6 months of operating expenses. HMRC recommends keeping a separate tax reserve for VAT and Corporation Tax obligations.
| Month | Income | Expenses | Net | Running Balance |
|---|---|---|---|---|
| Jan | £8,000.00 | £7,000.00 | £1,000.00 | £6,000.00 |
| Feb | £8,000.00 | £7,000.00 | £1,000.00 | £7,000.00 |
| Mar | £8,000.00 | £7,000.00 | £1,000.00 | £8,000.00 |
| Apr | £10,000.00 | £8,500.00 | £1,500.00 | £9,500.00 |
| May | £10,000.00 | £8,500.00 | £1,500.00 | £11,000.00 |
| Jun | £10,000.00 | £8,500.00 | £1,500.00 | £12,500.00 |
| Jul | £12,000.00 | £9,500.00 | £2,500.00 | £15,000.00 |
| Aug | £12,000.00 | £9,500.00 | £2,500.00 | £17,500.00 |
| Sep | £12,000.00 | £9,500.00 | £2,500.00 | £20,000.00 |
| Oct | £9,000.00 | £8,000.00 | £1,000.00 | £21,000.00 |
| Nov | £9,000.00 | £8,000.00 | £1,000.00 | £22,000.00 |
| Dec | £9,000.00 | £8,000.00 | £1,000.00 | £23,000.00 |
| Total | £117,000.00 | £99,000.00 | £18,000.00 | £23,000.00 |
| Strategy | Benefit |
|---|---|
| Invoice promptly & chase late payments | Reduces debtor days, improves inflows |
| Negotiate extended supplier payment terms | Preserves cash for longer |
| Set aside 20–25% of profit for tax | Avoids HMRC cash crises |
| Use a business overdraft facility | Safety net for short-term shortfalls |
| Review subscriptions & recurring costs | Eliminates unnecessary outflows |