Most forecast templates assume you get paid the month you invoice. You don't. This one lags your income by however long your customers actually take, which is usually where the hole comes from.
Use a negative number for a decline.
Not your terms. What happens.
Materials, subcontractors, direct wages.
Salaries, rent, software, insurance.
Paid over quarterly. Set to 0 if not registered.
Tax bill, vehicle, deposit.
| Month | Cash in | Cash out | Net | Closing balance |
|---|
Where a business is profitable but short of cash, the cause is usually that the work is delivered in month one and paid for in month three. Invoice finance closes that gap by advancing against the invoice the day you raise it. It does not help a business that is losing money on the work itself.
See what your ledger could releaseThree mistakes account for most of them. The first is putting sales in the month they are invoiced rather than the month they are collected, which makes an insolvent month look comfortable. The second is forgetting VAT, which sits in your account looking like your money for up to four months before HMRC takes it. The third is forecasting one line for costs instead of splitting variable costs that move with sales from fixed overheads that do not.
This tool handles all three. Sales are collected on your actual debtor days, VAT is accrued monthly and paid quarterly, and costs are split between cost of sales and fixed overheads on separate payment lags.
The number that matters is not the closing balance at month twelve. It is the lowest point along the way, and which month it lands in. A business that ends the year at £90,000 having dipped to minus £30,000 in month four did not have a good year; it had a year in which something had to give in month four.
If your low point is negative, you have three options: get paid sooner, pay later, or borrow across the gap. Most businesses reach for the third without seriously trying the first.
