Cash flow forecast calculator

Profit is revenue minus expenses on paper. Cash flow is about timing - when money actually lands in and leaves your account. A business can show a profit for the month while still running short on cash if expenses are due before customer payments come in.

Fixed costs stay roughly the same each month regardless of sales - rent, salaries, loan repayments, subscriptions. Variable costs move with sales - stock purchases, delivery, commissions, and payment fees. Splitting the two gives a more realistic forecast than one flat expense number.

Three months is useful for spotting an immediate cash squeeze. Six to twelve months is better for planning stock purchases, hiring, or a loan application, since it shows seasonal dips before they happen.

Act before the shortfall month arrives: bring in income earlier (chase overdue invoices, run a promotion), delay or reduce a non-essential cost, or arrange financing in advance rather than during the shortfall itself.

No. A cash flow statement reports what already happened from your books. This tool is a forward-looking planning estimate based on the assumptions you enter - useful for decisions, not for filing or financial reporting.

Five inputs: your opening cash balance today, expected monthly income, a monthly income growth percentage (leave at 0% for a flat forecast), fixed monthly expenses like rent and salaries, and variable costs as a percentage of income for things like stock and delivery. Then choose 3, 6, or 12 months.

The monthly income growth percentage raises each month's income on top of the previous one. With 5% growth, month two earns 5% more than month one, and month three earns 5% more than month two. A negative figure shrinks income, which is useful for modelling a slow season.

Variable costs are worked out as a percentage of each month's income, then added to your fixed expenses to get total outgoings for that month. If your variable costs are 20% and a month's income is KSh 100,000, that month carries KSh 20,000 in variable costs plus the fixed figure.

A month is flagged when the projected balance is expected to drop below zero, and the tool shows the lowest balance month with a clear warning. It is the cue to act before that month arrives - bring income forward, cut a cost, or arrange financing in advance.