A cash flow forecast lists money in and out by week until the low point shows. The examples here follow a concrete contractor, a gas station store restocking coolers and an insurance agency with a tax bill, with invented figures.
How to prepare a cash flow forecast for a Moorhead, MN concrete contractor with bid deposits ahead
A concrete contractor bidding on two Moorhead, MN jobs may have to put money down with each bid. A forecast shows whether payroll still clears if both deposits are out at once:
- Start with today's bank balance, not last month's.
- Enter each pay application the contractor expects to be paid, on the week it is likely to arrive.
- Illustration only, invented figures: enter two bid deposits of $3,150 each on the weeks they are due.
- If the bid documents say a losing bid gets its deposit back, enter the return on its expected week.
- Enter payroll on each payday and equipment payments on their due dates.
- Read across the weeks for the smallest balance; that week sets the size and timing of any funding.
If the low week is short only until a pay application clears, a credit line draw fits. If it stays short for months, the bids may be bigger than the business can carry at once.
13 week cash flow forecast: how it works for a Moorhead, MN gas station store restocking its coolers
Illustration only, invented figures: a Moorhead, MN gas station store starts with $3,900 in the bank. In-store sales come in each week, stock deliveries go out, payroll of $5,860 falls in odd weeks and $1,150 of other bills goes out every week. A large cooler restock of drinks and dairy ahead of a promotion lifts week 6 deliveries to $19,640. Only the store side is in this forecast.
| Week | In-store sales in | Stock and cooler restocks out | Payroll and other bills out | Ending cash |
|---|---|---|---|---|
| Week 1 | $17,750 | $12,900 | $7,010 | $1,740 |
| Week 2 | $17,200 | $13,100 | $1,150 | $4,690 |
| Week 3 | $18,450 | $12,750 | $7,010 | $3,380 |
| Week 4 | $16,950 | $13,300 | $1,150 | $5,880 |
| Week 5 | $17,900 | $12,850 | $7,010 | $3,920 |
| Week 6 | $17,450 | $19,640 | $1,150 | $580 |
| Week 7 | $17,650 | $12,950 | $7,010 | $1,730 short |
| Week 8 | $17,300 | $13,050 | $1,150 | $1,370 |
| Week 9 | $18,150 | $12,800 | $7,010 | $290 short |
| Week 10 | $16,850 | $13,200 | $1,150 | $2,210 |
| Week 11 | $18,000 | $12,900 | $7,010 | $300 |
| Week 12 | $17,400 | $13,150 | $1,150 | $3,400 |
| Week 13 | $18,250 | $12,850 | $7,010 | $1,790 |
Cash runs $1,730 short in week 7, a payroll week right after the big restock, and dips again in week 9 ($290 short). An invented $4,820 line draw at the start of week 7 keeps weeks 7 through 9 above $2,000; repaid 21 days later at 13.7% a year, it costs $37.99 of simple interest. By week 13 the store is back to $1,790 without the draw.
Updating the forecast every week, with real sales replacing estimates, is what makes it useful.
How can a business improve cash flow? A tax bill due at a Clay County, MN insurance agency
Cash flow improves from both ends: money comes in sooner, or goes out later or in smaller pieces. A few levers:
- Invoice the day the work is done, and follow up on anything past its terms.
- Ask suppliers for longer payment terms on large orders.
- Set money aside each month for bills that arrive once or twice a year.
- Spread a long-lived purchase over its life with equipment financing instead of paying cash.
- Keep a credit line in place for gaps, and repay each draw as soon as the money arrives.
Illustration only, invented figures: a Clay County, MN insurance agency owes a $7,460 tax payment that falls 41 days before its largest commission check. A line draw at 13.85% for those 41 days costs $116.06 of simple interest. A 6-month working capital loan at 14.6% would mean payments of $1,296.81 and $320.86 of interest. Setting aside $622 a month over the year before it falls due avoids both costs.
Business funding articles for Moorhead, MN, from boom lift quotes to a first request
The longer articles take on one cost each, with worked numbers:
- How much working capital a Moorhead, MN business keeps, worked through a distributor's cash cycle.
- Restaurant funding for a dish machine, headsets and a supplier price increase, with a card-sales advance beside a credit line draw.
- Scan tools, fluid exchange machines and a parts statement at an auto repair shop.
- Three equipment finance quotes on one boom lift for a builder, plus the wait for a final payment.
- A two-attorney law office's first business loan request, step by step.
- Ten records to pull before a request, from a print shop's statements to its trade-in offer.
For a cost that is due now rather than a topic to read about, call (218) 370-3099.
By Coralmoor Business Funding · Updated
