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Business Glossary
How to Calculate a 30-Day Cashflow Forecast
A 30-day cashflow forecast projects expected cash inflows and outflows over the next month, showing your closing cash position. It is the most important short-term financial management tool for any UK SME.
The Formula
Closing Cash = Opening Cash + Expected Receipts − Expected Payments
Worked Example — UK SME
Opening cash: £28,500. Expected receipts: £42,000. Expected payments: wages £18,000, rent £2,200, suppliers £14,600, VAT £6,800, other £3,400 = £45,000. Closing cash = £25,500.
UK Benchmark
📊 A 30-day forecast should be updated weekly. It is most valuable when honest — only include expected receipts when genuinely expected, not hoped for. An optimistic forecast provides false comfort.
Common Questions
What is the difference between a cashflow forecast and a P&L?
A cashflow forecast tracks actual cash movements. A P&L tracks revenue and costs when earned or incurred. A profitable P&L can coexist with worsening cashflow — particularly for businesses with long debtor days.
How do I build a 30-day cashflow forecast?
Start with opening bank balance. List all expected receipts by date. List all expected payments by date. Calculate running balance. Identify any negative balance periods — these require action.
What should I do if the forecast shows a negative balance?
Act before the shortfall: accelerate debtor collection, defer non-urgent payments (with communication), draw on an arranged overdraft, alert your bank early if the shortfall is significant.
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