Cash Flow Crunch? How to Build a Forecast That Helps You Stay Ahead

Cash is king—especially in today’s unpredictable economy. Yet many business owners are flying blind when it comes to cash flow.

Why Forecasting Matters

Without a solid forecast, you could be caught off guard by seasonal dips, rising costs, or delayed receivables. Forecasting gives you a roadmap to:

• Predict and plan for slow months
• Strategically time investments
• Avoid shortfalls that affect payroll or vendor relationships

How to Build a Forecast That Works

1. Start with Historical Data
   Use your last 12-24 months of income and expenses to identify trends.
2. Factor in Seasonal Variability
   Account for predictable highs and lows (e.g., Q4 spikes, summer slowdowns).
3. Build in Contingencies
   Include scenarios for late payments, inflationary cost increases, or unexpected repairs.

Example: A service-based business used forecasting to identify a likely shortfall in August. They proactively adjusted their marketing spend and offered early payment discounts to improve cash inflow—avoiding a cash crunch.

Action Steps:

• Use cloud-based accounting software to update forecasts monthly
• Partner with your CAAS advisor to regularly review and revise

If you have questions about your cash flow and how to forecast more effectively, leave a comment below or feel free to contact me directly. I’m happy to help!