Cash Flow Planning Guide & Template

Looking to take control of your business finances? Effective cash flow planning is key to making confident decisions, preparing for growth, and avoiding unnecessary financial stress. Whether you’re a sole trader or running a growing company, having a reliable strategy in place can be the difference between smooth sailing and a financial headache.

A well-managed cash flow strategy gives you clarity on when money is coming in and going out—so you can stay ahead of expenses, invest wisely, and navigate slower months without panic. It’s not just about surviving—it’s about setting your business up to thrive.

That is why our business advisors have prepared this simple cash flow planning guide and template.

Quick Summary

• Cash flow planning is about forecasting income and expenses.
• Helps prevent shortfalls, manage debt, and guide investment.
• Works best when reviewed monthly and updated regularly.
• Builds confidence in decision-making and strengthens financial resilience.
• Template included to get started today.

Why Cash Flow Planning Matters

Many businesses struggle not because they aren’t profitable, but because they run out of cash. This is often due to poor timing—more money going out than coming in at key moments. A structured cash flow plan ensures you know what to expect and can act early if problems arise, avoiding the need for last-minute loans or missed payments.

Cash flow planning allows you to:

• Anticipate shortfalls and arrange funding early
• Avoid late supplier payments or missed payroll
• Identify opportunities for reinvestment
• Track actuals vs forecast for better decisions
• Strengthen your position when seeking finance or investment
• Manage debt more effectively

It also ties directly into broader cash flow and financial planning goals, giving you more control over your long-term business trajectory. A clear understanding of your financial inflows and outflows supports better budgeting, forecasting, and strategic growth.

Key Strategies for Cash Flow Planning

1. Forecast Monthly

Build a forecast at least 6–12 months ahead. Break down income and expenses by month, so you get a full picture of where your business stands. Include:

• Expected customer payments
• Supplier costs and payroll
• Tax obligations (GST, PAYG, superannuation)
• Loan repayments and interest
• Subscriptions, rent, and insurance

Use conservative estimates—especially for income. It’s better to plan cautiously and be pleasantly surprised than to overestimate and fall short.

2. Review Regularly

Forecasts are only useful if you compare them to reality. At the end of each month:

• Compare forecasted figures with actual results
• Investigate significant variances
• Adjust future projections based on what you learn

This helps keep your plan grounded in real performance, rather than assumptions. It also helps you stay alert to small problems before they grow.

3. Invoice Promptly

Delays in invoicing lead to delays in payment. It may seem simple, but many businesses miss out on timely cash flow because they don’t invoice straight away. Best practices include:

• Sending invoices immediately after goods/services are delivered
• Setting reminders to follow up on overdue payments
• Using cloud accounting tools like Xero to automate invoicing and reminders

4. Set Payment Terms Strategically

Your terms matter. If your suppliers give you 30 days but your clients take 60 to pay, you could run into cash issues. Improve your cash position by:

• Offering early payment discounts to clients
• Charging interest on overdue invoices
• Negotiating longer payment terms with suppliers

Align your income and expense cycles to avoid unnecessary gaps in cash flow.

5. Build a Buffer

Aim to keep a cash reserve equivalent to 1–3 months of operating expenses. This isn’t always easy, but having a buffer:

• Provides peace of mind
• Reduces the need for emergency loans
• Helps you handle unexpected bills or dips in income

Even setting aside a small percentage of revenue regularly can make a big difference.

6. Plan for Seasonal Changes

Many businesses experience predictable highs and lows throughout the year. From retail to hospitality to construction, every industry has its cycles. Good cash flow management financial planning means:

• Looking back at previous years’ data
• Factoring in public holidays, weather, and industry-specific patterns
• Planning ahead for marketing, stock, or staffing needs during peaks

Seasonal planning helps avoid running short during quiet periods and positions you to maximise income during busy ones.

7. Use the Right Tools

Modern accounting software makes cash flow planning much easier. Tools like Xero, MYOB, or QuickBooks let you:

• Build live forecasts
• Automate reports
• Sync with bank accounts
• Get alerts on overdue invoices

The right software can save hours of admin and give you better oversight at a glance.

Simple Cash Flow Plan Template

Use the template below to map out your expected income and expenses over a three-month period. Adjust it to suit your business model, and expand it for longer forecasts.

Instructions:

• Fill in projected income and expenses for each month.
• Subtract expenses from income to calculate net cash flow.
• Add each month’s net flow to the previous cumulative balance to track your cash position.

This simple cash flow plan template helps visualise when cash may get tight, so you can act early and confidently.

Ready to Take Control of Your Finances?

M2 Corporate specialises in helping businesses build clear, tailored cash flow plans as part of broader advisory support. Whether you’re navigating seasonal fluctuations, managing growth, or just want more clarity in your finances, we’ll give you the insight and tools you need.

We don’t just give you a spreadsheet—we partner with you to understand your business and offer real, strategic advice you can act on.

Contact a business advisor in Perth today to create a custom cash flow planning strategy that fits your business goals.