How do I make a cash flow forecast for a small business?

GuideUKChecked 30 October 202611 primary sources8 min readUS version

The short answer

For a UK small business, list week by week for the next 13 weeks the cash you expect in, on the day each customer actually pays, and the cash going out: wages, suppliers, rent, loans, VAT and PAYE. Add each week to the last balance. The lowest week shows how much cash you need, and when.

What is a 13-week cash flow forecast?

A week-by-week view of your bank balance for the next quarter: opening balance, money in, money out, closing balance. It is long enough to catch a VAT quarter and three monthly payrolls, and short enough to forecast each customer's payment.

It is not a profit forecast. A business can be profitable and still run out of cash, because wages and suppliers are paid before customers pay. Roll it forward every week.

How do I build one from my books?

Start from today's bank balance and your list of unpaid invoices, then work through what goes in and out.

  1. Receipts: put each unpaid invoice in the week you expect the cash, judged by how that customer actually pays, not the due date. Add new work only once it is agreed.
  2. Regular payments: wages on paydays, suppliers on their terms, rent, insurance instalments, van leases and loan repayments.
  3. Tax: VAT, PAYE, Corporation Tax and Self Assessment on their due dates (below).
  4. Known jumps: the April pay rise, annual renewals, stock for a busy season and the set-up costs of a new contract.
  5. Closing balance: opening plus in, less out, carried to the next week. Mark the lowest week.
  6. Each week, replace the week just gone with what actually happened and add a new week 13.

Keep the VAT you collect separate: it was never your income.

Which tax dates go in it?

The ones that fall in the next 13 weeks, on the day the money leaves (As of Oct 2026):

PaymentWhen it is due
VAT1 month and 7 days after each VAT period ends, usually quarterly: 7 November for the quarter to 30 September
PAYE and National InsuranceBy the 22nd after each tax month, paying electronically
CIS deductions (construction contractors)By the 22nd after each tax month, paying electronically
Corporation Tax9 months and 1 day after the accounting period ends, unless the company pays by instalments
Self Assessment31 January (balancing payment and first payment on account) and 31 July (second payment on account)

What does a worked example look like?

A small firm with £12,000 in the bank. Wages and suppliers take £5,000 a week; rent and van finance £2,100 at the start of each month; PAYE £2,400 a month; the VAT quarter £7,800 in week 2.

Week (indicative, As of Oct 2026)Cash inCash outClosing balance
1 (rent, van)£6,000£7,100£10,900
2 (VAT)£5,500£12,800£3,600
3£4,500£5,000£3,100
4 (PAYE)£3,500£7,400minus £800
5 (rent, van)£7,000£7,100minus £900
6£6,500£5,000£600
7£6,000£5,000£1,600
8 (PAYE)£5,500£7,400minus £300
9 (rent, van)£8,000£7,100£600
10£6,500£5,000£2,100
11£7,000£5,000£4,100
12£6,500£5,000£5,600
13 (PAYE)£6,000£7,400£4,200

The quarter takes in £78,500 and pays out £86,300. The account goes overdrawn in weeks 4, 5 and 8, at worst by £900 in week 5, because the VAT and a payroll land before the receipts.

The fix here is chasing. Two overdue invoices worth £3,000, which on those customers' habits would arrive in week 9, brought in by week 3 keep the balance above zero all quarter, with the lowest point £600 in week 9.

What are the warning signs?

A lowest week below the cushion you want to keep, and the patterns that cause it:

  • A tax payment landing in the same week as wages or rent.
  • Customers paying later than your terms. Track debtor days: trade debtors divided by annual sales, times 365.
  • One customer owing a large share of what is due to you.
  • Profit on paper while the bank balance falls month after month.
  • VAT or PAYE money being used to pay other bills.

What can I do when a gap shows?

Act in the weeks before it: bring cash in sooner, agree to pay out later where you can, and only then borrow.

  • Chase. Invoice the day you finish and follow the steps in how to chase an unpaid invoice. A business customer who pays late owes statutory interest at 8% a year above the Bank of England reference rate, 11.75% where interest starts to run July to December 2026, plus £40, £70 or £100 per invoice (Late Payment of Commercial Debts (Interest) Act 1998, ss.4 and 5A; As of Oct 2026).
  • Change terms. Take a deposit before ordering materials, use stage payments on longer jobs and invoice monthly in advance where the contract allows. See what your terms should say and how to price a quote.
  • Talk to HMRC early. If a tax payment will be missed, call before the due date and ask for a Time to Pay arrangement.
  • Borrow for the right gap. An overdraft for a short dip; invoice finance if your customers are businesses; asset finance for vans and equipment. British Business Bank Start Up Loans lend eligible founders £500 to £25,000 each at a fixed 7.5% a year (As of Oct 2026). Read the facility letter for covenants before you sign.

The Academy lessons for builders short for Friday's wages and pubs and restaurants on the rent quarter day work the same problem. Ask your accountant to check the tax lines before you rely on them.

Greymill

How Greymill helps

Cash & Profit covers cash, profit, prices and forecasts: whether the numbers work. Ask it to build a cash flow forecast. Connect Xero or QuickBooks and it reads your books and shows the gap before it bites, answering with your live figures instead of what you type in. The work comes back as spreadsheets for you to check, such as the 13-week cash flow on the how it works page.

A late invoice is a cash problem, a letter and a decision at once: Daily Operations sets out the next steps, Writing drafts the chase and Cash & Profit checks the effect on your cash. Loans & Funding compares your finance options and gets you ready to talk to a lender. Your overnight brief names the next deadline, the cash to watch and three tasks for today.

Nothing is sent unless you press Send, and Greymill only changes your books when you press Approve and never makes a payment. It owes no professional duty and says when a regulated professional must sign something off. Conversations are not used to train AI. Try it free for 7 days on full Scale access, no card needed; plans from £100 a month plus VAT. See pricing and how it works.

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Questions owners ask

How far ahead should a small business forecast cash?

Thirteen weeks, week by week, is a practical default: long enough to take in a VAT quarter and three monthly payrolls, short enough to forecast each customer's payment. Roll it forward every week.

What is the difference between a cash flow forecast and a profit forecast?

Profit counts work when it is earned; cash counts money when it lands. A business can be profitable and still run out of cash, because wages and suppliers are paid before customers pay.

When is VAT paid in the UK?

For most businesses, 1 month and 7 days after the end of each quarterly VAT period, so VAT for the quarter to 30 September is due by 7 November. As of Oct 2026.

What if I cannot pay a tax bill on time?

Call HMRC before the due date and ask for a Time to Pay arrangement. Do not use VAT or PAYE money as a buffer: late payment brings penalties and interest.

What funding can cover a short cash gap?

An overdraft for a short dip, invoice finance if your customers are businesses, asset finance for vans and equipment, or a British Business Bank Start Up Loan of £500 to £25,000 at a fixed 7.5% a year for eligible founders. As of Oct 2026.

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