Cash flow projection sample for a 12-month plan

A cash flow projection sample is a 12-month grid with one column per month, opening cash at the top, inflows and outflows listed below, and closing cash at the bottom. You build it from a sales forecast, receivable and payable timing assumptions, and a full list of monthly costs, then compare it with actuals each month.

A blank spreadsheet is not a plan. You need to see what goes in each row before the grid is useful, and the cushion in most small businesses leaves little room to guess. A survey from Bluevine found that 20% of small business owners now operate with a cash cushion of only 7 to 14 days. With that little slack, a timing error of two weeks can mean a missed payroll.

What does a 12-month cash flow projection sample look like?#

A 12-month projection is a table with twelve month columns across the top and categories of money down the side. Each column starts with the cash you hold at the beginning of the month. It ends with the cash you hold at the end. The closing balance of one month becomes the opening balance of the next.

The rows fall into three blocks. Money in: customer receipts, loan drawdowns, grants, any other cash arriving. Money out: payroll, rent, suppliers, software, insurance, loan repayments, tax. Then the net movement for the month, which is money in minus money out, and the closing balance.

A projection is built on assumptions. You are not recording what happened. You are stating what you expect to happen, based on past sales, known contracts and the payment habits of your customers and suppliers. That makes the assumptions the part that deserves your attention, not the arithmetic.

The sample in this guide uses illustrative figures only. They are not benchmarks, and they will not match your business. They exist to show where each number sits and how one month feeds the next.

Twelve months is long enough to catch the large, predictable pressures: the quarterly VAT bill, the annual insurance renewal, the quiet season. It is also short enough that your assumptions still mean something. Beyond a year, most small businesses are guessing.

What is the difference between a cash flow forecast and a projection?#

A cash flow forecast and a cash flow projection both look ahead, and many people use the terms as if they were the same thing. The practical distinction is about what each one rests on and how far it reaches.

A cash flow statement is backward-looking. It records the cash that actually moved in a past period. Every figure is a fact. You use it to see what happened, not to decide what to do next.

A cash flow forecast is a short-horizon estimate, usually weeks or a few months, built from known invoices, bills and commitments. It answers one question: will the bank balance hold up over the next stretch? A 13-week view is the common example.

A cash flow projection runs further out, usually twelve months, and leans more heavily on assumptions about sales, growth and timing. It is the tool for planning a year, preparing for a funding application, or testing whether a hiring decision survives the quiet months.

The sample in this guide is a projection. It starts from actuals, which are your opening balance and your sales history, then moves into assumption territory. Treat the first few months as firm and the later months as a working estimate that you revise.

How do you set up the grid and assumptions for a cash flow projection?#

Setup takes three steps, and the order matters. The sales forecast comes first because every other line depends on it.

1. Develop a sales forecast based on previous performance.
2. Define key assumptions for receivables and payables based on real-world timing.
3. Structure a spreadsheet with 12 columns representing each month of the coming year.

Step 1: build the sales forecast#

Start from what you sold in the last twelve months, month by month. Adjust for what you know has changed: a contract won or lost, a price rise, a seasonal swing. Keep the adjustments specific and written down. "Sales will grow" is a hope. "Two new retainers starting in month 4" is an assumption you can check later.

Step 2: set timing assumptions#

Sales are not receipts. A customer who buys in March may pay in May. The same applies in reverse to your own bills. Two measures capture this.

Days sales outstanding, or DSO, is the average number of days between issuing an invoice and receiving the money. Days payable outstanding, or DPO, is the average number of days between receiving a supplier invoice and paying it. Pull both from your own invoices rather than assuming the terms on paper. Customers rarely pay on the due date, and your DSO should reflect what they actually do.

The gap between the two is the number that decides how much cash you carry.

Step 3: structure the 12 columns#

Open a spreadsheet and label twelve columns, one per month of the coming year. Add a row for opening cash at the top and a row for closing cash at the bottom. Leave the middle for categories. Keep the layout simple enough that you can read it in under a minute.

Cash flow projection sample in Excel: inflows, outflows and opening balance#

Steps 4 and 5 fill the grid. Step 4 is the opening balance: the cash you hold on the first day of month one, taken from your bank statement, not from memory. Step 5 is every anticipated monthly expense and one-off outflow, sorted into rows.

Group the rows into categories. Inflows: customer receipts, loan drawdowns, grants. Outflows: payroll, rent, suppliers, software, insurance, loan repayments, tax. Receipts come from your Step 1 sales forecast shifted by your DSO. Supplier payments come from your costs shifted by your DPO.

The table below shows four months of an illustrative sample. The figures are invented to show where each number sits. They are not benchmarks. Each month's closing cash is opening cash plus total money in, less total money out.

Fill the cells with your own numbers and follow the same logic across all twelve columns. The mechanics matter more than any single figure. A loan drawdown lifts receipts in one month and creates a repayment row in the months after. A VAT bill is absent for two months, then lands as a single large outflow.

You do not need to build this from nothing. Free Excel layouts for a 12-month cash flow projection template are widely available, and any of them gives you the rows and formulas. Treat a free template as scaffolding. The assumptions inside it still have to be yours.

Check every closing balance by hand once. A formula that points at the wrong cell will carry an error through all twelve months.

How do you handle VAT, seasonal tax and late customer payments?#

Put each tax payment in the month it leaves your bank account, not the month it relates to. This is the single most common timing error in a 12-month plan, and it is the one that hurts most.

VAT is usually quarterly, so it shows as a large outflow every third month and nothing in between. Your plan should show a long flat stretch, then a spike. If your VAT line is spread evenly across twelve months, the grid is hiding the exact months where cash is tightest.

Seasonal tax works the same way. Corporation tax, income tax payments on account and annual insurance renewals each land in specific months. Check your own calendar and enter each one where it falls. Map these outflows before you finish the grid:

• Quarterly VAT.
• Corporation tax or income tax payments.
• Employer PAYE and National Insurance.
• Annual insurance and licence renewals.
• Seasonal stock purchases ahead of a busy period.

Late customer payments need their own treatment. Do not assume invoices are paid on the due date. Use your real DSO from Step 2 and apply it to the sales forecast, so a March sale shows as a May receipt if that is how your customers behave. If a few large customers pay later than the rest, model them separately and pull their receipts back by the extra weeks.

A projection that assumes on-time payment shows a healthy balance that never arrives. This matters more when the cushion is thin. If 20% of owners run with only 7 to 14 days of cash, a customer paying three weeks late is the difference between meeting payroll and missing it. Many owners absorb the shortfall themselves: a Bluevine report found 42% of owners delayed their own pay in the last year to keep the business running.

Build a late-payment case. Copy the sheet, push your largest receipts back by two to four weeks, and read the lowest closing balance. That is your real risk.

How do you check the projection and move to a three way cash flow forecast?#

Step 6 is a variance analysis. At the end of each month, enter the actual figure beside the projected one for every row. Work out the difference. Then ask why.

A variance has a cause, and the cause tells you what to change. Receipts came in below plan: was it fewer sales, or slower payment? Suppliers cost more: was it price, or volume? Fix the assumption behind the variance and roll the corrected figures forward through the remaining months. A projection you never revisit becomes a record of old guesses.

Judge your reserve against your own sector, not a published average. Work out how many weeks of fixed costs your lowest projected balance would cover. Then ask how volatile your receipts are and how long your longest customers take to pay. A business with steady monthly retainers needs less cash behind it than one with lumpy project income. Set your minimum from that volatility and the lowest point on your own grid.

The 12-month grid has a limit. It tracks cash only. It cannot tell you whether a profit shown in the P&L ever becomes money, or how a loan, a stock build or a new hire changes the balance sheet. Change one assumption and you have to update the other statements by hand.

A three way cash flow forecast links the P&L, balance sheet and cash flow so that one change flows through all three. Sell more on credit and receivables rise on the balance sheet, profit rises in the P&L, and cash stays flat until the customers pay. The three statements stay in step because they are built from the same inputs.

That matters if you are preparing for investors or a lender, who will read all three. The appetite for this is real: OnDeck reports that 93% of small business owners anticipate moderate to significant growth in the coming year, and growth is exactly when working capital stretches and the three statements start to diverge. Concerns about cash flow had also eased by the time of OnDeck's latest reading, though many owners still report them.

Is Excel or specialised software better for a 12-month cash flow plan?#

Excel is better when your model is small, your assumptions are stable, and one person owns the file. Specialised software is better when you need the P&L, balance sheet and cash flow to move together, or when more than one person edits the numbers.

A spreadsheet fails in predictable ways: a formula breaks when someone inserts a row, or a pasted value overwrites a calculation unnoticed.

bluprnts is a financial planning tool that builds forecasts for small businesses and startups without needing accounting software. You enter products and pricing, headcount, sales, costs and financing lines. It then derives the P&L, balance sheet, cash flow, runway and investor-ready reports from those inputs. You do not need a ledger or accounting software to start, so a business with no bookkeeping history can still build a forward view. It's free to start, and subscriptions are priced by last year's revenue, from £49 a month.

Software does not replace judgement. The assumptions behind your sales forecast and your DSO are still yours, and a model built on bad timing assumptions produces a tidy wrong answer.

When cash is tight and a month is too coarse a unit, a weekly view helps. The 13-week cash flow template guide walks through that shorter view.

If you want the full method behind both views, the guide to building a cash flow forecast covers it from the start.

FAQs#

What is the difference between a cash flow forecast and a cash flow projection?#

A forecast is a short-horizon estimate, usually weeks or a few months, built from known invoices and bills. A projection runs further out, usually twelve months, and leans more on assumptions about sales and timing. A cash flow statement is different again: it records what already happened. The sample in this guide is a projection, with firm early months and softer later ones that you revise as actuals arrive.

How do you handle late customer payments in a 12-month plan?#

Use your real days sales outstanding rather than the terms on your invoices, and apply it to your sales forecast so a March sale shows as a May receipt if that is how your customers behave. Then build a late-payment case: copy the sheet, push your largest receipts back two to four weeks, and read the lowest closing balance. That figure is your real risk.

Is Excel or specialised software better for small business forecasting?#

Excel suits a small, stable model with one owner. Specialised software suits a business that needs the P&L, balance sheet and cash flow linked, or has several people editing. Excel is flexible but breaks silently when a formula is overwritten. Software keeps the statements in step. Neither fixes poor assumptions, so test your timing inputs whichever you choose.

Where can you find a free cash flow projection sample in Excel?#

Free Excel layouts for a 12-month cash flow projection template are widely available from accountancy and banking sites, and any of them gives you the rows and formulas. Treat a free template as scaffolding. Replace its example figures with your own sales forecast, your own DSO and DPO, and your real tax dates, or the output will look neat and mean nothing.

How often should you update a 12-month cash flow projection?#

Update it every month, when your actual figures arrive. Enter the actuals, work out each variance, fix the assumption behind it, and roll the corrected numbers through the remaining months. If cash is tight, check it weekly or move to a 13-week view. A projection you never revisit turns into a record of old guesses.

Conclusion#

A cash flow projection sample is a 12-month grid built from a sales forecast, honest timing assumptions and a full list of costs, with VAT and tax placed in the month they leave your account. Compare it with actuals every month and fix the assumption behind each variance. When you need the P&L, balance sheet and cash flow to move together, a spreadsheet stops being enough.

Start by checking your real DSO against your last twelve months of invoices. Then copy your grid and test a late-payment case. Read the lowest closing balance and decide whether you can live with it.