Manage your Cash Flow

Cash Flow Planning for SMEs

A healthy cash flow is one of the cornerstones of every successful business, giving it the resources not only to operate but to invest and grow as it needs.  As a business owner having a clear view of the amounts and timing of funds coming in and out of the business gives you the ability to plan effectively and the time to make informed financial decisions to ensure you remain profitable.  

Pressures on cash flow are generally caused when sales receipts lag behind sales typically through delays in payments from customers.  A business with healthy profits on paper can suddenly find itself with insufficient funds to pay suppliers and staff and have to raise funds quickly to bridge the gap.  Proper cash flow forecasting can help to prevent this by spotting negative cash flow trends before they occur.  Other benefits of cash flow planning include:

Keeping track of customers that are behind on payments or regularly pay late.
Enables forecasting to cover different scenarios such as losing a large client.
Allowing the business to make better use of extra cash available.

Managing Your Cash

If your business is not currently using financial forecasting to plan your cash flow then we can help.

We empower businesses to make better financial decision with reliable and accurate cash flow forecasting.  We tailor our service to your needs and  can provide additional support to raise funds should a negative period be forecasted.

Cash Flow Planning Cash Flow Frequency

Cash flow planning is a way of measuring the funds that will be coming into and going out of your business over a specific period of time.  It includes overheads such as building costs, staff wages, loan repayments, tax, and any other expenditure your business is expected to have.

Combining this with past, present, and expected future income gives a clear picture of the business’s overall financial health.  

Cash flow planning is often used to aid future decision making and to highlight any upcoming gaps in cash flow that may need to be acted upon.


The size of your business and the amount of cash moving in and out of your business will help to determine the most appropriate frequency for your cash flow forecasting, however in most cases we would recommend a 12-month forecast.  To get maximum value from your cash flow planning we do also recommend a higher level forecast covering a 5 year period which can support longer term planning and your wider financial strategy.

Working with Equifino, we would start with a 12-month forecast and expect the first 6 months of it to be highly accurate.  Any notable variance from this forecast would be investigated to find the cause and adjustments made to the plan if appropriate.

The forecast should then be monitored and updated with any new client receipts or outgoings to ensure it remains accurate.  We recommend this is done monthly but it depends on the amount of change in the business cash flow.  In the event of a forecast of a negative period, we would help you understand the impact on the business and recommend options should funding need to be raised.

Frequently Asked Questions

Below are just a few of the questions we are regularly asked about cash flow forecasting.  If your question isn’t covered below just get in touch, we would be happy to answer any other questions you may have. 

We also have lots of other help and information in our Knowledge Hub.

Cash flow planning is an excellent way of using your business data to help build up a picture of the movement of cash in and out of the business over the medium to longer term so that you can make informed decisions and plan appropriately.

However, not all events can be forecast such as a change in legislation of the loss of a large client suddenly, and so it cannot guarantee that you will never face cash flow issues. 

It does however provide a means to quickly model the impact of such a scenario, and alongside other financial strategies help to ensure the longevity and security of your business.

For a smaller business formal cash flow planning can seem like an unnecessary task and far down the list of priorities.  Owners can feel that they know customers and suppliers well and have smaller sums to manage and so less risk of an issue arising.

However, cash flow can often be much tighter in smaller businesses and without the means to identify an issue in advance a negative cash balance can be more damaging putting the business at risk of closure or force the business owner to take on unwanted debt to fill the gap.

No.  Your existing accountancy software may already include a cash flow planning tool which can be used, or you can simply use an excel spreadsheet to track your expected income and expenses over the relevant period.   We can help to set everything up for you as part of our cash flow planning service.

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