Why Every Business Needs a Cash Flow Projection

A business can be profitable on paper and still go bankrupt. Why? Because cash flow, not net income, keeps your doors open. Cash pays your salaries. Cash covers rent. Cash buys inventory.
That’s why every successful business leader—from solopreneurs to CFOs—builds and maintains a cash flow projection.

What Is a Cash Flow Projection?

A cash flow projection is a forward-looking report that estimates how much cash will enter and leave your business over a given period (typically weekly or monthly). It tells you:
📅 When cash will come in (e.g., customer payments, loans)
🧾 When it will go out (e.g., payroll, suppliers, taxes)
🚦 Whether you’ll have enough to cover expenses

5 Key Reasons Every Business Needs a Cash Flow Projection

🧯 Avoid Surprises (and Payroll Panic) A detailed projection warns you before your cash runs low.
No more last-minute calls to lenders—or missed payrolls.
📌 Jerardo Case: One eCommerce client projected a £40,000 shortfall in Q3 and was able to renegotiate payment terms in advance.

What our customers say

I learned the hard way that cash flow is king. Profit on paper won't keep the lights on.

Connor Quinn

Cash flow projection saved my business from bankruptcy. Net income means nothing without cash in hand!

Frank Kinney

Cash flow is the heartbeat of your business. Make sure it's strong to keep the doors open.

Dorothy Wallace

Identify and Fix Cash Leaks Early

You’ll spot patterns like:
Late-paying customers
Over-ordering inventory
Unnecessary subscriptions
Fixing these can instantly boost liquidity.

Attract Lenders and Investors

A polished projection signals maturity and planning.
Banks, VCs, and angels all ask: “What’s your cash runway?”
“How are you managing inflows and outflows?”
Having a 6–12 month cash forecast = credibility.

Plan for Seasonality and Risk

Cash ebbs and flows with:
Sales cycles
Holiday seasons
Market fluctuations
A projection lets you build buffers in advance.
Jerardo Example: A seasonal construction firm avoided borrowing costs by forecasting slow winter months 6 months ahead.

Tools to Build a Cash Flow Projection

🔹 Simple DIY Options:
Google Sheets or Excel (with 3 sections: Inflows, Outflows, Cash Balance)
Jerardo’s Free Cash Flow Template (ask for it below!)
🔹 Advanced Tools: Float (Xero/QuickBooks integration)
Fathom
Dryrun
LivePlan

What to Include in Your Projection

🟢 Cash Inflows: Customer payments (by invoice terms)
Loan receipts
Asset sales
Investor funding

🔴 Cash Outflows: Payroll
Rent/Utilities
Vendor payments
Tax liabilities
CAPEX (equipment, assets)

🟡 Cash on Hand: Your starting bank balance

FAQ – Why Every Business Needs a Cash Flow Projection

What’s the difference between cash flow and profit?

Profit is your earnings on paper, while cash flow reflects your actual money movement in and out. You can show a profit on your P&L but still run out of money due to delayed payments or high upfront costs. Cash flow is what keeps the lights on.

How often should I update my cash flow projection?

At a minimum: monthly. For businesses with tight liquidity or seasonality: weekly projections are ideal. Rolling forecasts (e.g. 13-week view) are industry best practice—especially during growth or downturns.

What time period should a projection cover?

Short term (4–13 weeks): Ideal for managing daily operations and payroll
Mid-term (3–6 months): Great for project planning or vendor negotiations
Long-term (6–12 months): Helps with strategic planning, investor pitches, or bank loans

We recommend all 3 for a complete view.

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