Cash Flow Forecasting for Australian Small Businesses

Cash flow forecasting shows you how much money will be in the bank in the weeks and months ahead, not just what happened last quarter. As a result, you can spot a tight month early and act before it turns into a problem. Business Ninjas builds and maintains practical forecasts for small businesses Australia-wide, all done remotely.

Profit and cash are not the same thing. For example, a business can be profitable on paper and still struggle to pay wages, suppliers or the next BAS. That’s why a forecast is often the most useful report a small business owner can have.

What our cash flow forecasting service includes

Every business is different, so we shape the forecast around how your money actually moves. Typically, the service includes:

• A rolling 13-week cash forecast, updated weekly or fortnightly
• A 12-month forecast that ties in with your budget and plans
• GST, PAYG withholding, super and other set-asides mapped to their due dates
• Seasonal patterns, such as a busy December and a quiet January
• What-if scenarios, for example hiring, a new vehicle or a price change
• A short summary in plain English, so you know what to do next

We usually build the forecast from your accounting file. If your books need a tidy-up first, our bookkeeping team at BN Books can bring them up to date. Then the numbers we forecast from are reliable.

Who cash flow forecasting suits

Forecasting helps almost any business, although it matters most when cash is lumpy or growth is quick. In particular, it suits:

• Service businesses and consultants with irregular invoices
• Retail, hospitality and ecommerce businesses with seasonal swings
• Health, beauty and allied health practices with staff costs to cover
• Trades and project businesses waiting on progress payments
• Growing businesses planning to hire, borrow or invest

How the forecasting process works

First, we have a short discovery call to understand your business, your goals and what keeps you up at night. Next, we connect to your accounting software and review your recent income, costs and debtors. After that, we build the first forecast and walk you through it on a video call.

From then on, we update the forecast on a regular rhythm and compare it with what actually happened. Over time, this makes the forecast more accurate. It also builds a habit of looking forward instead of only looking back.

Tools we work with

We work in the cloud tools most small businesses already use, such as Xero, MYOB and QuickBooks, along with simple spreadsheets where they make sense. Because everything is online, there is no need to drop off paperwork or visit an office.

Why forecasting beats guessing

Without a forecast, most owners manage cash by checking the bank balance. However, the balance does not show the quarterly BAS, the annual insurance bill or the large supplier invoice due next month. A forecast puts those dates in front of you, so there are fewer surprises.

A good forecast also makes conversations with your bank or lender easier. In short, it shows you understand your numbers and have a plan.

The Australian Government’s guide to managing cash flow on business.gov.au also recommends a regularly updated cash flow statement. We simply do the heavy lifting for you and keep it current.

How cash flow forecasting fits with our other services

Forecasting works best alongside a budget and regular reporting. So many clients pair it with small business budgeting and monthly business performance reporting. If you would rather hand over the whole finance function, see our outsourced finance management service. For bigger plans, our business growth consulting work uses the forecast to test each idea before you commit.

Tax lodgements, including BAS, are handled by our sister business BN Tax. As a result, your forecast and your compliance dates stay in step. You can see everything we offer on our business advisory services page or return to the Business Ninjas home page.

Frequently asked questions

What is cash flow forecasting?

Cash flow forecasting estimates the money coming into and going out of your business over the coming weeks and months. It shows the expected bank balance at each point, so you can see shortfalls early.

How far ahead should a small business forecast?

Most small businesses benefit from a rolling 13-week forecast for day-to-day decisions and a 12-month forecast for bigger plans. We usually set up both.

Do I need to use Xero to work with you?

No. We work with Xero, MYOB, QuickBooks and spreadsheets. If your records are behind, BN Books can catch them up first.

Can you work with my business if you are not local?

Yes. Business Ninjas is 100% remote and works with small businesses all over Australia by phone, email and video call.