This is an estimate of your anticipated sales (such as invoices you expect to be paid, or payments made on credit), revenue, grants, or loans and investments. Receivables (money received/cash in) for next period So the opening balance in one month should equal the closing balance at the end of the previous month. Your closing balance is the amount in your bank at the end of the period. (So, if you’ve just started your business, this is zero.) Your opening balance is the balance in your bank at the start of a period.

This includes data about your business’s income and expenses. It ultimately provides an overview of how much cash the business is expected to have on hand at the end of each month.Ĭash flow projections typically take less than an hour to produce but can go a long way in helping entrepreneurs identify and prepare for a potential shortfall, and make smarter choices when running their business. That includes payroll, taxes, payments to suppliers and vendors, rent, overhead, inventory, as well as the owner’s compensation.Ī cash flow projection (also referred to as a cash flow forecast) is essentially a breakdown of expected receivables versus payables. Accounts Payable:refers to the exact opposite-that is, anything the business will need to spend money on.Accounts Receivable: refers to the money the business is expecting to collect, such as customer payments and deposits, but it also includes government grants, rebates, and even bank loans and lines of credit.In order to properly create a cash flow forecast, there are two concepts you should be aware of: accounts receivable (cash in) and accounts payable (cash out)

Cash flow projection example