Use dates, not just sales targets
A sale in April may be collected in May. A stock order may require a deposit before goods arrive. Place the cash movement in its expected month and retain the invoice or agreement behind the date.
Start with bank and cash balances that are available to the business. Keep an expected loan, owner injection or asset sale separately labelled so it cannot be mistaken for routine customer collections.
- Set a starting date and reconcile opening available cash.
- Schedule customer receipts using due dates and recent payment behaviour.
- List committed supplier, payroll, rent and other payments.
- Roll each month's closing cash into the next month's opening.
- Compare actual movement with the forecast and explain differences.
Build a delayed-collection scenario
Keep the planned case and change one assumption at a time. Delaying a large customer receipt exposes the month in which cash becomes tight. Use that result to discuss payment timing or operational choices, not to assume a lender will fund the gap.
A negative model balance means the plan needs a funding or payment solution. It does not create an approved overdraft. User-entered forecasts should not be presented as guaranteed outcomes.
Review the forecast with actual results
Mark assumptions as confirmed, estimated or uncertain. Keep a short explanation for material changes and a person responsible for each uncertain receipt. Revisit the forecast when a large customer delays, a new order is accepted or a commitment changes.
This management forecast is useful for cash planning but does not replace a statutory statement of cash flows or an assessment of solvency.
Worked example
A profitable month can still close with less cash
Fictional month opens with LKR 100,000. Expected collections are LKR 200,000 and payments LKR 260,000. The delayed case shifts LKR 80,000 collections into the next month.
- Planned cash before paymentsOpening balance plus receipts.
- LKR 300,000.00
- Planned closing cashPay the scheduled bills.
- LKR 40,000.00
- Delayed-case closing cashThe delayed receipt creates a funding gap.
- -LKR 40,000.00
The LKR 80,000 delay moves the plan from LKR 40,000 available cash to a LKR 40,000 shortfall. The forecast makes the timing problem visible.
Frequently asked questions
Do I use invoice sales or collections?
Use expected cash receipts for the month. Keep invoices as evidence, but a sale is not a receipt until money arrives.
Is the worksheet a guarantee of future cash?
No. It is an assumption-based model. Update dates, amounts and uncertainty as circumstances change.
Sources and limits
Forecast inputs are assumptions. This page does not provide lending, investment or solvency advice.
- IFRS Foundation — IAS 7 overview
Background on cash movement and the distinction between operating and financing activity; this resource is a management workflow, not an IFRS compliance assessment.
Accessed: 2026-10-08