To start a cash flow projection, you’ll need to sell more than you’re spending. You can predict cash flow by preparing a seasonal forecast:
Step 1: Create a list of assumptions based on sales growth estimates, price increases from suppliers, seasonality, general cost increases, and wage increases.
Step 2: Write down anticipated sales income based on industry trends, internal price changes, and economic factors.
Step 3: List out estimated cash inflows, including government grants, tax refunds or GST rebates, loan proceeds, royalties, or equity contributions.
Step 4: Write down estimated expenses, including supplier payments, wages for staff, asset purchases, and loan repayments.
Step 5: Combine all this information by adding cash inflows and deducting outflows. This will give you a better idea of what your cash position is.