Cash Flow Estimator
Project monthly inflows and outflows to find the point where the balance goes negative.
Cash Flow Estimator
Cash Inflows
+$80,000Cash Outflows
-$51,500Summary
Profitable businesses fail on cash, not profit
Profit and cash are different things, and the gap between them is where solvent businesses die.
Profit is recognised when a sale is made. Cash arrives when the invoice is paid — commonly 30 to 90 days later, sometimes never. Meanwhile suppliers, staff and rent are paid on their own schedule, which is usually sooner.
So a business can be profitable on every sale and still run out of money, and the faster it grows the worse this gets: growth means buying more inventory and paying more staff before the resulting revenue arrives. This is why rapid growth is a common cause of insolvency, and why "we are profitable" is not an answer to "can we make payroll".
The number that matters is the cash conversion cycle: how long money is tied up between paying for something and being paid for it. Shortening it — invoicing sooner, collecting faster, negotiating longer supplier terms, holding less stock — frees cash without needing another sale or another investor.
Improving cash flow without raising money
- Invoice immediately and accurately —The clock starts when the invoice is issued, and an invoice with an error goes to the back of the queue.
- Take deposits or milestone payments —For project work, 30–50% upfront transforms the cash position and is standard practice in most industries.
- Shorten payment terms —Net 14 rather than net 30. Negotiable far more often than people assume, particularly with smaller customers.
- Negotiate supplier terms —The mirror image. Paying suppliers in 45 days while being paid in 14 is the cycle you want.
- Chase systematically —A defined process — reminder before due, note on the day, call at seven days — collects substantially faster than ad hoc chasing.
- Arrange credit before you need it —A facility is far easier to obtain when the numbers look healthy. Applying during a squeeze is the worst time and the worst terms.
- Watch inventory —Stock is cash converted into something you cannot spend. Slow-moving lines tie up more than their margin justifies.
About
The Cash Flow Estimator helps businesses and freelancers understand their monthly cash position by tracking all inflows and outflows against an opening bank balance. Add as many income and expense line items as needed — revenue streams, client payments, payroll, rent, marketing, subscriptions, and other costs. The tool instantly calculates total inflows, total outflows, net cash flow, and the closing balance. Positive net cash flow means your business is generating more cash than it consumes; negative means you are drawing down your reserves. Monitoring cash flow regularly is essential — many profitable businesses fail because they run out of cash even when their P&L looks healthy.
How to use
- 1 Enter your opening cash balance — the amount in your bank account at the start of the period.
- 2 Add each cash inflow with a label and amount (revenue, client payments, loans, investments).
- 3 Add each cash outflow with a label and amount (payroll, rent, utilities, marketing, software).
- 4 Click "+ Add inflow" or "+ Add outflow" to add more line items as needed.
- 5 Review the summary: total inflows, total outflows, net cash flow, and closing balance update in real time.
- What is the difference between cash flow and profit?
- Profit is revenue minus expenses on an accrual basis — it includes money owed to you (accounts receivable) and money you owe (accounts payable) even if it has not yet changed hands. Cash flow tracks actual money moving in and out of your bank account. A business can be profitable but cash-flow negative if customers pay late or if large expenses are due before revenue arrives.
- What does a negative closing balance mean?
- A negative closing balance means your projected outflows exceed your opening balance plus all inflows — you will run out of cash before the end of the period. This is a warning sign that requires action: accelerate receivables collection, defer non-critical payments, draw on a credit line, or reduce expenses. Negative cash flow is survivable short-term but must be addressed quickly.
- How is this different from a P&L (profit and loss) statement?
- A P&L reports revenue and expenses on an accrual basis for a period. The cash flow statement tracks actual cash movements. This tool models a simplified direct cash flow statement — useful for near-term planning and stress-testing. For formal accounting purposes you would also need to reconcile non-cash items (depreciation, amortisation) and working capital changes.
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