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Start with the money available now, then map when payments are expected to arrive and leave. A cash flow forecast looks ahead at cash movements, rather than simply showing whether your business is profitable.[1][2] For a small employer, it is a way to prepare a more useful conversation about the weeks ahead.
This is general information and practical preparation, not financial, tax or legal advice. The Scottish Government guidance linked here explains the forecasting basics; its local support links are Scotland-specific.[1] Ask your accountant or adviser about your own business structure, tax position and the support available where you operate.
Start with dates, not a perfect spreadsheet
Try beginning with a blank sheet and a period you can describe confidently. Put the dates across the top and give the sheet a clear starting date. You could work through the coming weeks with the person who normally handles your bookkeeping, then ask whether a longer view would be useful.
The basic ingredients are receipts, payments, the difference between them, and opening and closing balances.[1] You do not need to decide on a new software package before gathering that information. A first conversation might simply identify which records you already have and which dates need checking.
Keep a space for notes beside the figures. Mark who supplied each estimate and when you last checked it. If something is unknown, write that down rather than adding a confident-looking figure to fill the gap. The question for your adviser becomes much clearer: “We know this payment is coming, but we are unsure which week.”
Separate sales from money received
A profitable business can still have periods without enough cash available.[2] When you discuss the forecast, distinguish work booked, invoices sent and money actually received. They are different points in the customer relationship.
For each expected receipt, try noting the customer, the amount and the expected payment date alongside your reason for choosing that date. Check the actual invoice and agreed terms instead of relying on memory. Where the date is uncertain, keep the uncertainty visible.
The Insolvency Service specifically flags possible payment delays as something companies should consider.[3] You could ask your bookkeeper to show a separate version with an important receipt arriving later. Treat this as a question to explore, not a prediction about that customer. Do not change the original forecast without recording what changed.
Put the awkward outgoing dates on the page
Gather the records for regular outgoing payments and anything less frequent that falls within your chosen period. Possible prompts include payroll, premises costs, supplier bills, insurance renewals and equipment payments. Use your actual records; this is not a universal checklist of what every business owes.
For taxes, pension payments or anything you do not understand, ask the person responsible to confirm the amount and date. Keep an unresolved question beside the entry. Avoid copying another business’s assumptions or treating a remembered deadline as confirmed.
If you and a colleague share the work, agree who checks each entry. One person could gather the supplier statements while the other reviews expected customer receipts. Before combining them, compare the dates covered so the same payment is not entered twice. Keep the working file somewhere both authorised people can find it.
Check what the forecast is telling you
The Scottish Government recommends reviewing and updating forecasts as circumstances change, and comparing forecast amounts with actual amounts.[1] Reserve a short review in the diary and bring the latest records rather than simply carrying the previous estimate forward.
Ask what changed since the last version. Was an expected payment late? Did a bill arrive earlier? Is an entry missing, or is the business facing a genuine gap? Keep a dated note of the answer. That gives the next conversation a starting point without pretending every estimate will be right.
A busy order book does not remove the need for this check. The Insolvency Service notes that successful companies can experience cash flow difficulties during growth.[3] If the figures suggest a problem meeting commitments, take the forecast and underlying records to a suitable adviser. Do not treat this article as a decision about borrowing, delaying payments or taking on more work.
Leave the first review with one clear next step
For your first session, gather the current balance, expected receipts and outgoing-payment records, then identify the dates you still need to confirm. Agree who will answer those questions and when you will review the revised sheet together.
The aim is a forecast you can explain, including its uncertainties. If you need professional help, bring that working version rather than waiting until it looks polished. For other practical reading about running a small organisation, explore the MH360 Businesses & Employers hub.
Sources
[1] Cashflow forecasting: mygov.scot
