Cash Flow Forecast Excel - Free Template

1. Open the Instructions sheet first and read the setup notes. This tells you where to enter your opening bank balance and how the colour coding works.
2. Go to the Cash Flow Forecast sheet and enter the opening balance in the starting cell. Then fill in the yellow input cells with expected receipts and payments for each period.
3. Use realistic timings for customer receipts and supplier payments. If a £4,800 invoice is usually paid 30 days late, build that delay into the month it is likely to clear.
4. Check the Summary Dashboard after each update. Look at the closing balance, the largest monthly outflow and any period where cash turns negative.
5. Record standing assumptions on the Transactions and Assumptions sheet. Add regular costs such as rent, PAYE, rent, loan repayments, VAT or stock purchases.
6. Update the forecast at a fixed time each week or month. A short update after the payroll run or before the VAT deadline keeps the numbers current.

This is the sheet you reach for when the bank balance matters more than the profit and loss. A sole trader waiting on two late invoices, a bookkeeper at a Ltd company before month-end, or an office manager checking whether next week's wages will clear all need the same thing: a clear view of cash by period.

The template fits real working moments. A builder with 4 employees may need to see whether £18,000 of payroll, £6,000 of materials and a £9,000 customer payment all land in the same fortnight. A small online shop with 300 orders a month may look fine on sales, but still need to bridge card processor delays and stock payments.

When the forecast becomes useful

You use it at the point where timing starts to matter. That is often before a VAT quarter-end, before wages are due, or when a big supplier asks for payment on 14 days instead of 30.

It is also useful for private households with mixed income, especially when one wage lands on the 25th and another on the last working day. If rent is £1,200, car finance is £310 and childcare is £680, one delayed payment can leave the account tight even though the month looks profitable on paper.

What the sheet is doing

The forecast sheet is there to turn expected income and outgoings into a running balance. That is what lets you see a £7,500 closing balance in one month and a £1,200 shortfall in the next without waiting for the bank to tell you.

HMRC expects you to keep business records long enough to support your tax return and figures. For the self-employed, keep records for at least 5 years after the 31 January Self Assessment deadline for that tax year; companies normally keep accounting records for 6 years.

This template helps because a cash forecast is often the first place you see the tax timing problem. A £9,000 VAT bill on a quarterly return under Making Tax Digital can hit when customer receipts are still 3 weeks away, so the cash forecast is the place to spot the gap early.

UK tax timing that affects cash

The tax year runs from 6 April to 5 April. If you owe income tax, class 2 or class 4 National Insurance, or PAYE liabilities, those payments need to be built into the forecast as real cash outflows, not left sitting in profit.

For VAT-registered businesses, the registration threshold is £90,000 of taxable turnover in 2026. If your turnover is £92,000 and you charge the standard rate of 20%, you will collect output VAT that is not yours to spend, so the forecast should separate cash collected from cash available.

Cash is not profit

A business can show a healthy profit and still run out of money. For example, if you invoice £20,000 in March but only collect £8,000 before the VAT and payroll dates, the forecast is what tells you whether the bank balance survives the gap.

The most common failure is optimistic timing. If you assume a customer will pay in 14 days but the real average is 37 days, the forecast can look safe by £10,000 or more on paper when the bank is already under pressure.

Another error is leaving out one-off items such as VAT, annual insurance, software renewals or a director loan repayment. A single missed £4,500 supplier payment, added to a £6,200 payroll run, can be enough to trigger bank charges or force a late payment to another creditor.

The costs of bad timing

Bad cash forecasting usually costs time first and money second. You spend hours chasing debtors, rearranging payments and explaining delays to suppliers, and you may still pay overdraft interest or late payment charges.

If you miss a VAT reserve of £3,600 on a small business account, you can end up transferring funds from personal savings at the last minute. If wages are due and only £2,000 remains in the bank, you may need to delay a supplier or use expensive short-term borrowing.

Why the template reduces errors

The sheet structure helps you keep receipts, outgoings and assumptions visible together. That makes it much easier to spot a duplicated bill, an omitted payment or a receipt that has been counted twice.

The forecast works best when you update it on a fixed rhythm. For most small businesses, that means a weekly check for the bank balance and a fuller review at month-end, payroll run or before the VAT deadline.

The aim is to make the workbook part of an existing job rather than a separate chore. If you already do the bank reconciliation every Friday, update the forecast straight after it and compare the closing balance with the actual balance.

Simple habits that keep it alive

• Copy the last forecast period forward and overwrite only the changed figures.
• Use the Transactions and Assumptions sheet for regular items such as rent, wages, subscriptions and VAT reserves.
• Flag unusual items in a different colour so they stand out during review.
• Check any negative balance before you commit to a payment run.

When to move on from a spreadsheet

If you are handling hundreds of receipts a month, or several bank accounts and currencies, a spreadsheet may become too slow to maintain. At that point you are better moving to accounting software with bank feeds and proper cash planning tools, then using the workbook only for quick scenario testing.

For a small team with one bank account and predictable monthly costs, the spreadsheet is usually enough. It gives you the right balance of control and simplicity without locking you into a heavier system too early.

For a small team with one bank account and predictable monthly costs, the HMRC mileage claim template fits the same simple workflow for tracking reimbursements without moving to heavier software too early.