Develop a 12 month cash flow forecast

Profit can look fine while cash runs dry — especially when growing. A 12-month cash flow forecast maps when money actually enters and leaves the bank, so you can fund growth without a crunch.

Do this

1. Lay out 12 months and your starting cash balance.
2. Add expected cash in (when customers actually pay) each month.
3. Subtract expected cash out (bills, payroll, purchases) each month.
4. Watch the running balance for any month that dips dangerously low.

12-Month Cash Flow Map

For each month, track the running balance:

Starting cash + Cash IN (payments you'll actually receive that month) − Cash OUT (bills, payroll, purchases, taxes) = Ending cash → becomes next month's start

Watch for any month where ending cash goes negative or near-zero — that's a crunch you can now plan around (speed up invoicing, delay a purchase, line up credit before you need it).