Cash Flow Forecast Calculator

How to Use This Tool

1. Enter your current starting cash balance, including all business checking, savings, and payment processor accounts.
2. Input your average monthly revenue based on the last 3 months of sales data for the most accurate forecast.
3. Add your total fixed monthly expenses, including rent, full-time salaries, software subscriptions, insurance, and loan payments.
4. Enter variable expenses as a percentage of revenue, covering costs like shipping, payment processing fees, raw materials, and returns.
5. Set your emergency buffer target (3-6 months of fixed expenses is recommended for small businesses).
6. Select your desired forecast period from 1 to 12 months using the dropdown menu.
7. Click the Calculate Forecast button to generate your detailed cash flow projection.
8. Use the Reset button to clear all fields and start a new forecast.

Formula and Logic

This calculator uses standard cash flow forecasting logic to project your business's future cash position:

• Monthly Variable Expenses = Average Monthly Revenue × (Variable Expenses % / 100)
• Total Monthly Expenses = Fixed Monthly Expenses + Monthly Variable Expenses
• Monthly Net Cash Flow = Average Monthly Revenue - Total Monthly Expenses
• Total Forecast Revenue = Average Monthly Revenue × Forecast Period (Months)
• Total Forecast Expenses = Total Monthly Expenses × Forecast Period (Months)
• Ending Cash Balance = Starting Cash Balance + (Monthly Net Cash Flow × Forecast Period)
• Months to Deplete Cash = Starting Cash Balance / Absolute Value of Negative Monthly Net Cash Flow (only applies if monthly cash flow is negative)

Practical Notes

• Small business advisors recommend maintaining an emergency buffer of 3-6 months of fixed operating expenses to cover unexpected slowdowns or market shifts.
• E-commerce sellers typically see variable expenses between 10-20% of revenue, covering payment processing fees (2.9-3.5%), shipping, and return costs.
• Trade and B2B businesses should note this calculator assumes revenue is received in the same month as sales; if you offer net-30 or net-60 payment terms, reduce your monthly revenue input by the percentage of sales with delayed payment.
• A healthy small business should aim for a monthly net cash flow of at least 10-15% of revenue to fund growth initiatives and build reserves.
• If your forecast shows a negative ending cash balance, review your pricing strategy to increase margins or cut non-essential fixed expenses like unused software subscriptions.

Why This Tool Is Useful

• Identify potential cash crunches 3-12 months in advance, giving you time to secure financing or adjust spending.
• Model "what-if" scenarios by adjusting inputs, such as a 20% revenue drop or a new fixed expense like hiring additional staff.
• Share forecast results with investors, lenders, or business partners to demonstrate financial planning and stability.
• Align inventory purchasing, marketing spend, and hiring plans with your projected cash position to avoid overspending.

Frequently Asked Questions

What if my revenue varies significantly month to month?

Use your lowest average monthly revenue for conservative forecasting, or create separate forecasts for peak and off-peak seasons if your business is seasonal. You can also calculate a weighted average revenue if you have predictable slow periods.

How do I calculate my variable expense percentage?

Add up all variable costs from your last month of operations, divide by your total monthly revenue, and multiply by 100. For example, $3,000 in variable costs divided by $20,000 in revenue equals a 15% variable expense rate.

What counts as a fixed expense vs a variable expense?

Fixed expenses stay the same regardless of sales volume, including rent, salaries, insurance, and subscriptions. Variable expenses scale with sales volume, including shipping, payment fees, raw materials, and commissions.

Additional Guidance

• Revisit and update your cash flow forecast monthly as new sales and expense data becomes available to keep projections accurate.
• If your ending cash balance is below your emergency buffer target, prioritize collecting outstanding invoices or reducing discretionary spending immediately.
• B2B businesses with long payment terms should track accounts receivable separately and adjust revenue inputs to reflect actual cash received each month.
• E-commerce sellers should factor in inventory restocking costs, which may be a fixed cost for bulk orders or variable for on-demand suppliers.