There are two ways to improve how you manage your cash flow.The first is working capital management (managing stock, managing suppliers and debt recovery).
The easiest way to prepare a cash flow forecast is to break the task into several steps.
Then bring all the information together at the end.
Since cash flows are all about timing and the flow of cash, you will need to have an opening bank balance (i.e.
actual cash on hand), then add in all the cash inflows and deduct the cash outflows for each period, usually by month.
The five steps to preparing a cash flow forecast are: For existing businesses, look at last year's sales figures.
Then decide what adjustments you will need to make based on past trends, i.e.Use below Cash flow worksheet to forecast and record cash flow.The worksheet will update your figures as you type.The second, described here, is using cash flow forecasting.A cash flow forecast is the most important business tool for every business.For each month list the items and total the figures under the headings Cash incoming and Cash outgoing.Use the outline below as your starting point for your cash flow statement for each month: Whether you've already started or intending to start, you'll need to fill in actual or estimated figures against each item.It tracks all the money flowing in and out of your business and can reveal payment cycles or seasonal trends that require additional cash to cover payments.This cycle or pattern can help you plan ahead and make sure you always have money to cover your payments.See Finance for more information on managing and seeking finance.On your cash flow statement, list all your incoming and outgoing cash items with the dollar amount for the next 12 months.