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Free 12 Month Cash Flow Statement Template. Free Cash Flow Projection for 12 Months. Ready for Immediate download with 1 Click. Get It Now!
One of the most significant pain points of managing a small business is the Cash Flow Projection for 12 Months. It can all be overwhelming.
To run a successful and profitable business, it’s a good idea to get an understanding of balance sheets, income statements, and cash flow statements. Although linked to one another, each one serves a unique purpose.
There’s one other thing that’s commonly overlooked, yet it is just as important as a balance sheet and an income statement. And that’s running out of cash from improper cash flow management. This is one of the top reasons why small businesses and startups fail.
Cash is the lifeblood of any business, and this article provides an in-depth overview of how to prepare, read, and analyze a 12-month cash flow statement template. But first, let’s look at the goal of a cash flow statement.
The 12-month cash flow statement template explained:
In financial accounting, a cash flow forecast — also known as a cash flow projection —provides businesses with a snapshot of their company’s future cash on hand. It shows how much money your business will make and how it will spend it during a given period. It also shows how well a company is managing its cash to pay back debt and fund operating expenses.
Cash Flow Forecast enables you to identify cash flow trends—so you can make better decisions on how to better use cash to drive business growth. Here is a cash flow forecast example. If your cash flow forecast example indicates less cash on hand in the first quarter of the year, then it is not the right time to invest cash into new, expensive office equipment. Instead, you’d need to focus your efforts on growing revenue to improve profitability. A cash flow statement is used to attract new investments, improve your fundraising efforts, and get more access to financing options.
Use this template to create a cash flow forecast that allows you to project cash inflows and outflows. This cash flow forecast excel template is designed for easy planning, with a simple spreadsheet layout and alternating colors to highlight rows. You get a snapshot of cash flows over a 12-month period in a basic Excel template.
12 Month Cash Flow Statement Template Financial Plan Template Will Help You
See and compare business expenses and income for periods
Prove to lenders your ability to repay on time
Optimize the Timing of Accounts Payable and Receivable
Understand the impact of future plans and possible outcomes
Enable you to identify when problems are likely to occur
Determine if you need to make adjustments like cutting expenses
Estimate incoming cash for the next periods
Identify Your Inflows and Outflows
Plan for Future Growth
Plan for upcoming cash gaps
Benefits of using a 12 Month Cash Flow Statement Template Financial Plan Excel Template
Track your spending and staying within budget
Have you written a vague idea of cash inflows and cash outflows on the back of a napkin? All is well and good.
Looking at the income statement will give you a snapshot of the past business performance, but it won’t show the future in terms of the cash flow.
With a cash flow forecast, you can plan future cash inflows and cash outflows and compare it to the budget, which can be invaluable information.
Avoid Cash Flow Shortfalls
Unexpected Cash Flow shortfalls can cause significant damage to your business, and it may take months to recover.
Negative Cash Flow can appear if you don’t continuously track the incoming cash and outgoing of your business.
Fortunately, you can solve Cash Flow shortfalls with a bit of effort.
Forecasting your Cash Flow will help you identify — and plan for — market fluctuations, sales seasonality, and other cases that can lead to unpredictable Cash Flow.
Cash Flow Forecast can even help you visualize Cash Flow trends with the help of automatically generated charts and graphs.
Manage accounts receivable.
By creating a Cash Flow Forecast that takes invoices and bills into account, you’ll be more easily able to identify who is systematically paying late. You could even go on to model different payment dates on overdue invoices to see the real effect of late payments on your cash flow.
Identify cash gaps and surpluses before they happen.
Forecasting your future cash balance helps you see well in advance when you may have a cash deficit that could hurt your business.
Cash Flow Forecasting will give you enough time to take action to prevent a crisis. It will enable you to access better loan rates or speed up incoming payment to bridge the gap.
On the other side, if you know ahead of time that the large lump of cash will lay in your bank account within the next three months. In this case, you might need to explore options to reinvest it in your business to drive growth.
Plan for Future Growth
Cash flow forecasts can help you plan for future growth and expansion. No matter you’re extending your company with new employees and need to take into account increased staff expenses. Or to scale production to keep up with increased sales, future projections help you see accurately where you’re running — and how you’ll get there.
Forecasting is also a well-known goal-setting framework to help you plan out the financial steps your company has to take to reach targets.
There’s power in Cash Flow Projections and the insight they can provide your business.
Fortunately, this competitive advantage comes with little effort when you use the Cash Flow Statement Forecast Excel Template.
Manage surplus cash
Most companies don’t have excess cash in the bank. It is a well-known situation. But managing surplus cash for reinvestment in new market opportunities, or debt repayments can be essential to keeping stay in the business.
Managers are entirely ready to plan for what to do with the cash surplus if they have the forecast of when and where the business will have surplus cash in the bank account.
Cash Flow Statements Projection will provide supplementary guidance on what to do with a cash surplus.
Predict the Influence of Upcoming Changes
Does your company plan to purchase new equipment or to launch a new product? Cash Flow Projections enable you to obtain a complete picture of the effect that specific changes will have on your cash flow.
When planning your finances in the Cash Flow Forecast Excel Template, you will forecast cash inflows and outflows based on future invoices, bills due, and payroll.
You can then create multiple “what if” scenarios, such as buying new equipment to choose the best way for you.
Forecasting shows you how the upcoming changes will affect your cash balance.
Prove You Can Pay Back the Loan You Requested
When you apply for a business loan, bankers will study your cash flow forecast in an attempt to answer this question: Can this business pay back the loan?
Requesting a loan without showing your Cash Flow Forecast for paying it back is a common way to land in the rejection pile. It is exceptionally accurate if your current cash flow won’t cover all of your monthly operating expenses — plus your loan payment.
Don’t fall into this kind of situation. Use Cash Flow Projections to strengthen your case by showing the banker exactly how you plan to use the loan and when you will start repaying the debt.
This type of forecasting helps you create a road map that can impress a lender with the confidence they need to approve your loan.
This model template comes as a TRIAL or PREMIUM version in .xlsx file type which can be open using MS Excel. The TRIAL version does not include formulas and has cells locked while the PREMIUM version is fully editable with all formulas disclosed.