How often should I update my cash flow forecast?

Weekly for the next 4-8 weeks (detailed), monthly for 3-12 months ahead. Update it every time a major invoice is paid or a new expense arises. Many accounting software packages (Xero, MYOB, QuickBooks) can generate rolling cash flow forecasts automatically from your actual data.

What if my cash flow forecast shows a shortfall?

Options: 1) Chase outstanding invoices aggressively. 2) Offer early payment discounts. 3) Delay non-essential purchases. 4) Arrange a line of credit or overdraft (do this BEFORE you need it). 5) Consider invoice financing/factoring. 6) Negotiate longer payment terms with suppliers.

Should I include GST in my cash flow forecast?

Yes! GST collected from customers is NOT your money — it belongs to the ATO. Include it as both income (when received) and a liability (when BAS is due). Many businesses get caught out by quarterly BAS payments because they didn't set aside the GST. Best practice: separate bank account for GST/tax.

Cash Flow Forecast

AI + Live Data

Project your business cash flow over time. See when cash runs low, plan for seasonal dips, and ensure you can cover expenses and loan repayments.

Free to useNo data storedAI insightsUpdated: February 2026

Cash flow is the #1 reason small businesses fail — not lack of profit, but running out of cash at the wrong time. You can be profitable on paper but unable to pay wages if your clients take 60 days to pay. This tool projects your cash position over 6-12 months, factoring in seasonal variation, payment delays, and upcoming expenses. It highlights when cash runs low so you can arrange finance, chase invoices, or delay purchases BEFORE it becomes a crisis.

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Real-World Examples

Consulting Business

A consulting firm earns $80,000/month revenue with $55,000/month expenses and $30,000 cash. Clients pay on 45-day terms.

Monthly surplus: $25,000. But with 45-day payment terms, there's always ~$120,000 in outstanding invoices. If two major clients pay late simultaneously, the $30,000 buffer only covers 2 weeks of expenses. Recommendation: build cash reserve to $110,000 (2 months) and consider invoice financing.

Seasonal Retail Business

A surf shop peaks Nov-Feb ($60,000/month) but drops to $15,000/month in winter. Expenses are steady at $30,000/month.

Summer surplus: $30,000/month × 4 = $120,000. Winter deficit: $15,000/month × 4 = -$60,000. The business needs to bank $60,000+ during summer to survive winter. Without planning, it runs out of cash by July.

Frequently Asked Questions

Glossary

Cash Flow

The movement of money in and out of your business. Positive cash flow means more money coming in than going out. Different from profit, which is an accounting measure.

Accounts Receivable

Money owed to your business by customers who haven't paid yet. High receivables with slow payment = cash flow problems even if profitable.

Working Capital

Current assets minus current liabilities. The cash available for day-to-day operations. Healthy working capital means you can pay bills, wages, and suppliers on time.

Invoice Financing

A financing arrangement where a lender advances you cash against outstanding invoices (typically 80-90% of invoice value). Costs more than a traditional loan but provides immediate cash flow.

Related Tools

Business Loan Calculator

Calculate loan repayments to include in your cash flow forecast.

Invoice Payment Calculator

Calculate invoice amounts and payment terms impact on cash flow.

Break Even Calculator

Find the revenue level where your business covers all costs.

How to Use

1Enter your average monthly revenue and expenses.
2Input your current cash balance.
3Select your revenue seasonality pattern.
4Choose how quickly your clients typically pay.
5Add any major upcoming expenses.
6Get a month-by-month cash flow projection with alerts.

Key Information

82% of businesses that fail do so because of cash flow problems (ASIC data).
The average Australian SME has $50,000 in outstanding invoices at any given time.
BAS/GST liability is often the surprise that catches businesses off guard — set aside GST collected each month.
A cash flow forecast is essential for loan applications — lenders want to see you can service repayments.

Pro Tips

Set aside GST (and PAYG if applicable) in a SEPARATE bank account every month — don't spend it.
Offer 2% early payment discount for 7-day terms — it costs you 2% but you get cash 23+ days faster.
If you have seasonal dips, arrange a line of credit BEFORE you need it — banks don't lend to desperate businesses.
Review your cash flow weekly, not monthly — small problems caught early are much easier to fix.

Avoid These Mistakes

Confusing profit with cash — you can make a $200,000 profit and still run out of cash if invoices aren't paid.
Not accounting for BAS/tax liabilities — your quarterly BAS can be 20-30% of revenue and catches many businesses off guard.
Growing too fast without cash reserves — every new client needs supplies, staff, and time before they pay.
Not having a cash buffer for emergencies — aim for 2-3 months of expenses in reserve.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026