How to Create a Cash Flow Forecast in Excel (No Finance Background Needed)

Here is something that happens to a lot of people running a small business or side hustle. They are making money. Things look fine. And then out of nowhere an unexpected bill shows up and suddenly there is nothing left in the account.

This is not usually a profit problem. It is a timing problem. Money did not come in at the right time to cover money going out. And the frustrating thing is that it is almost always avoidable if you can see it coming.

That is exactly what a cash flow forecast does. It is just a simple plan that shows you what cash is expected to come in and go out each month, so you can spot trouble before it arrives rather than after.

You do not need to be good at maths. You do not need to know anything about accounting. You just need Excel (or even Google Sheets) and about an hour of your time.

Plain English Explanation

What actually is a cash flow forecast?

Imagine writing down in your diary every time you expect to get paid, and every bill you know is coming up. Then you check whether you will have enough in your account to cover everything. That is a cash flow forecast. It is basically a future view of your bank account, written out month by month before it happens.

The Steps

1

Open Excel and Create a Simple Grid

Open a blank Excel spreadsheet. You are going to build a simple grid. Along the top, put the months you want to plan for. Start with the next 3 months as that is plenty to get going.

Down the left side, you will have your row labels. You need three sections: money coming in, money going out, and a running balance at the bottom. That is all there is to it structurally.

Your basic layout — CashFlow.xlsx

	Month 1	Month 2	Month 3
💰 MONEY IN
Sales
Other income
Total In
💸 MONEY OUT
Rent
Other expenses
Total Out
🏦 BALANCE

💡

Keep it simple to start. You can always add more rows later. A simple forecast you actually use is worth ten complicated ones gathering dust.

2

Write Down Every Way Money Comes In

Under your Money In section, list every source of cash you expect to receive. Not what you have invoiced. Not what you are owed. The date you actually expect it to land in your bank account. That timing detail is really important.

• Payments from customers or clients

• Regular salary or wages going into the business

• Rental income from any property

• Loan money if you are expecting a payment

• Any grants or one-off payments you are waiting on

Think of it this way: If a customer owes you $500 but they usually pay 30 days late, put that $500 in the month you actually expect to receive it, not the month you sent the invoice. The gap between the two is where most cash flow headaches come from.

3

List Everything That Goes Out

Now do the same for outgoings. Go through your last couple of bank statements and write down everything that leaves your account. People are often surprised by how many regular payments they have quietly racking up in the background.

Do not forget the ones that only come up once or twice a year. Things like annual software renewals, insurance, or a big tax bill. These are the ones that tend to catch people off guard. Pop them into whichever month they are actually due.

• Rent, rates, or mortgage payments

• Wages for any staff or contractors

• Utility bills and subscriptions

• Loan or credit card repayments

• Tax payments (these can be big, plan ahead)

• Stock, materials, or anything you need to buy to operate

• Marketing, tools, or anything else you spend regularly

📅

Put it in the right month. If your annual insurance is due in March, do not spread it across the year. Put the full amount in March. That way you will see exactly what your bank account is dealing with that month.

4

Let Excel Do the Maths

Here is the bit where Excel saves you a load of time. You do not need any special formulas. You basically need Excel to add things up. Click on your Total In cell and type =SUM( then select all the income rows above it and close the bracket. Do the same for Total Out. That is it.

Then at the bottom create a row called Net Cash which is just Total In minus Total Out for that month. And below that have an Opening Balance and a Closing Balance row. Your closing balance is your opening balance plus your net cash for the month.

Example with real numbers

	January	February	March
Total In	$3,200	$2,800	$4,500
Total Out	$2,600	$3,400	$2,600
Net Cash	+$600	-$600	+$1,900
Opening Balance	$1,000	$1,600	$1,000
Closing Balance	$1,600	$1,000 ⚠️	$2,900

🔗

Link the balances together. Set your February opening balance to equal your January closing balance cell. Then drag the formula across. This way the whole thing updates automatically when you change any number anywhere.

5

Put in Your Real Starting Balance

Log into your bank account right now and check your balance. Whatever it shows, type that number into your Month 1 opening balance cell. That is your starting point and everything flows from there.

Get this right and your forecast will actually reflect reality. Make it up and the whole thing becomes guesswork.

Simple analogy: Think of it like your petrol gauge. You need to know how much is actually in the tank right now before you can work out whether you will make it to the next petrol station. Your bank balance is your current reading.

6

Look for the Warning Signs and Take Action

Now take a step back and look at the closing balance row across all your months. This single row tells you almost everything you need to know. Any month where that number is low or goes negative is a problem you can now solve before it happens.

You have a few options if you spot a difficult month ahead. You could chase invoices to bring money in earlier. You could push a big purchase back a month or two. You could arrange a small overdraft or credit line as a buffer just in case. Any of those is better than being surprised.

And then the most important habit of all: update the forecast at the end of every month. Replace your estimates with the real numbers. Adjust future months if things have changed. It only takes 15 to 20 minutes and it keeps the whole thing useful.

🎯

The businesses that do this consistently almost never get caught out by cash problems. It is not magic. It is just planning. Put a reminder in your calendar for the last day of every month and protect that time.

You can genuinely do this. Today.

A cash flow forecast does not need to be complicated or perfect. A rough one that you look at regularly will do far more good than a detailed one you build once and forget about.

Give yourself an hour this week. Open Excel, start with the next 3 months, and fill in what you know. Once you can see your money laid out like this, a lot of the financial stress and guessing just quietly disappears.

Your future self will be glad you did it.