Cash flow forecast template for tradesmen

Posted on: 10 February 2014

Use our cash flow forecast template to look after your cash throughout the year.

All businesses need to keep an eye on their cash flow. Running out could mean you have to stop work temporarily because you don’t have enough money to buy materials for your next job.

So to get started, we’ve developed a cash flow forecast template specifically designed for tradesmen.

What is a cash flow forecast?

The aim of a cash flow forecast is to make sure you have enough accessible cash in your business to pay for the things that keep it going. For example, fuel, tool repairs and supplies. Your cash flow forecast will reveal whether or not a shortage of money is expected, giving you a chance to find a way of bringing some in before it runs out.

A cash flow forecast usually shows the expected monthly incoming and outgoing money of your business for a 12 month period (this could include; cash payments, bills, wages, direct debit transfers, cheques). It also shows your expected cash position (surplus or deficit) for each month.

A cash flow forecast has nothing to do with profit or margins. It is solely about the timing of your business income and expenditure.

Where do I start?

Use our simple cash flow forecast for tradesmen as a starting point – you can download it here.

Every trade will have its own bespoke cash flow forecast, as it will include income and outgoings that are specific to it alone. Therefore it is important to tailor the template to your business by adding rows to the income and expenditure sections and estimating when you expect money to come into or go out of your business throughout the year. There may also be rows in this template that you don’t use – this is fine too.

Don’t expect to know exactly when every penny is going to come into our go out of your business. Work in round pounds or tens of pounds and put in figures where you can. When you have finished, your cash flow forecast will flag up future months when you may not have enough cash to pay for vital things.

Remember that a cash flow forecast relates to the income and outgoings of your business, so only record items when you expect money to be received or paid.

What do I do with my cash flow forecast once it’s finished?

Don’t file your cash flow forecast away once it’s complete. Look at the figures and think about what they tell you about your business.

For example:

  • Does the closing cash balance at the end of each month meet the needs of the business in the following month? If not, can you change anything about how and when cash will be coming into and going out of your business? For example, the day of the month you make loan repayments or the day you visit the bank to cash in your cheques.
  • If there is regularly a cash flow surplus, once you have checked the figures talk to your accountant about adjusting your borrowing requirements or investing in another van, more staff or new equipment.
  • As the months go by, regularly update your cash flow forecast with actual cash income and outgoings and revise your estimates for your business’s future cash flow. This will give you a good basis upon which to create your cash flow forecast next year.

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The information and tools contained in this guide are of a general informational nature and should not be relied upon as being suitable for any specific set of circumstances. We have used reasonable endeavours to ensure the accuracy and completeness of the contents but the information and tools do not constitute professional advice and must not be relied upon as such. To the extent permitted by law, we do not accept responsibility for any loss which may arise from reliance on the information or tools in our Knowledge Centre.