How to Forecast Cashflow Month by Month
Template + worked example for micro-business owners.
“Profitable businesses go bankrupt all the time. Cash flow — not profit — is the thing that keeps the lights on, and most founders model it wrong, once a year, in a panic.”
The Insight
A monthly cashflow forecast is not an accountant's toy. It is the single most powerful diagnostic in your business. Run it religiously for a year and you will predict exactly when to hire, when to cut, when to raise, and when to walk.
01
Three Columns: Actuals, Committed, Expected
Every month of the next twelve gets three columns. Actuals: cash you already have or have received. Committed: contractually certain inflows and outflows (signed contracts, fixed costs, payroll). Expected: pipeline-dependent revenue and flexible costs. Most founders collapse the three and lie to themselves. Separating them forces honesty — and shows you exactly how much of your 'future' is actually a prayer.
02
Run It in Three Scenarios Every Month
Best case assumes your pipeline closes. Base case assumes 50%. Worst case assumes no new revenue for 90 days. Run all three, every month. The worst case is what drives decisions — because that's the scenario where you decide whether to hire, to spend, to borrow. If your worst case dips below three months of runway, you have a cashflow crisis that hasn't happened yet — and that's the best time to act.
03
The Weekly Reconciliation
Every Friday, update the current month against reality. Variances over 10% get investigated on the spot. A £5,000 surprise in week one becomes a £20,000 surprise by month-end if you don't catch it. The discipline of looking every Friday is the difference between a business that surprises you once a year and one that surprises you never.
The Takeaway
Build the spreadsheet once. Run it weekly. The founders who know their numbers never have to explain them to an angry bank manager in a rush.
Want This Installed Into Your Business — Not Just Read?
The resource is the framework. Our coaches and ecosystem turn it into results — faster, with fewer mistakes. Book a no-obligation call to see if we're a fit.
More from Micro & Scale-Up Resources
How-To Guide
How to Systemise a Founder-Led Business
Document, delegate, and disappear from daily operations.
How-To Guide
How to Build Your First Standard Operating Procedures
Which processes to capture first and how to keep them alive.
How-To Guide
How to Hire Your First Manager
Letting go of control without losing quality.
How-To Guide
How to Diversify Beyond One Big Customer
Reduce concentration risk and stabilise revenue.