You track your company's cash flow with four numbers each month: the balance at the start, what actually came in, what actually went out, and the balance at the end. Then you forecast the next three months the same way, so you see a shortfall well before it happens. One table is enough, plus an hour at the start of each month with your accountant or whoever follows your books.
What many people miss is that a company can make a profit on paper and still fail to pay salaries, since profit is counted at the sale and cash arrives at collection. Here you get the template, a hypothetical example, and five decisions to take before your balance hits the danger line. This is general management guidance, not accounting or tax advice.
Why cash differs from profit
Cash flow is the actual movement of money in and out. International accounting standard IAS 7 describes the statement of cash flows as showing how an entity's cash and cash equivalents changed during the period. An owner only needs to remember this hypothetical example:
| Item | What shows in profit | What happens to cash this month |
|---|---|---|
| A 500,000 contract on 60-day terms | 500,000 revenue | 0 |
| The cost of delivering it | 400,000 cost | 400,000 out |
| Result | 100,000 profit | 400,000 short |
The deal is good, yet the company may stumble before collecting. So the income statement does not replace this table, though both are needed, as we explain in the financial reports that help an owner decide. The US Small Business Administration's guide also includes cash flow projections among its tools for managing money.
The monthly tracking template
Copy the table and make each column a month. Record what actually happened in the bank and cash box, and not what should have happened.
| Item | Last month, actual | This month, expected | Next month | The month after |
|---|---|---|---|---|
| Opening balance | ||||
| Customer collections | ||||
| Contract deposits | ||||
| Other receipts | ||||
| Total in | ||||
| Salaries | ||||
| Suppliers | ||||
| Rent and utilities | ||||
| Marketing | ||||
| Taxes and social insurance | ||||
| Installments and loans | ||||
| Total out | ||||
| Closing balance | ||||
| Safe minimum |
The closing balance becomes the next month's opening balance. In a tight period, or when numbers move quickly, switch to a weekly table over 13 weeks, since a month can hide a week when cash will not cover payroll.
How to forecast money in and out without fooling yourself
An optimistic forecast is worse than none, since it reassures you about a balance that does not exist. Apply these rules:
- Collections at their realistic date. If a customer usually pays after 75 days on a 30-day contract, write 75. Open your receivables aging report and see who runs late.
- Expected sales by likelihood. Do not count an unclosed deal as certain cash. Put it in a separate column so you can see the position without it.
- Non-monthly commitments. Taxes, social insurance, license renewals and annual allowances. Put them in their actual month.
- Seasons. Look at the same month last year before relying on the annual average.
- Marketing budget. Include the figure from how to set your company's marketing budget, and ask if cash can carry it until collections arrive.
The tax is not your money
The VAT you collect from customers will go out to the tax authority, so do not treat it as available cash. In Saudi Arabia, an announcement on Q2 2026 dates shows that monthly returns for businesses with supplies above SAR 40 million, and quarterly returns for those below, were due on 31 July 2026. In Egypt, check dates with your accountant. Issuing e-invoices does not change this obligation, but it makes invoice timing an important part of planning.
A hypothetical example that reveals a shortfall early
An entirely hypothetical service company has set itself a safe minimum of 100,000.
| Item | Month 1 | Month 2 | Month 3 |
|---|---|---|---|
| Opening balance | 200,000 | 155,000 | 75,000 |
| Total in | 350,000 | 300,000 | 280,000 |
| Total out | 395,000 | 380,000 | 390,000 |
| Closing balance | 155,000 | 75,000 | 35,000 short |
At the start of month 1 the owner sees 200,000 and feels fine. But the table says the balance falls below the safe line in month 2 and runs short in month 3. That gives roughly eight weeks to act, instead of finding out on payday.
Five decisions that raise available cash
| Decision | What to do | Watch for |
|---|---|---|
| Faster collection | Invoice on delivery day, follow up before the due date, name an owner | Most delay starts with a late invoice |
| Deposits and milestones | Tie new contracts to a deposit and stage payments | Make it part of the offer, not a later request |
| Supplier terms | Negotiate terms that match your collection times | Do not lose a discount worth more than the delay |
| Stock | Reduce what does not move, and buy in smaller lots | Stock is money sitting on a shelf |
| Expense timing | Postpone what can wait, and stop what brings no return | Do not start with what brings sales if it is profitable |
Decide early where funding will come from if you need it. Asking for a bank facility while you are in good shape is far easier than asking in the week of a crisis.
How much your safe minimum should be
There is no binding percentage, and it varies by business. A practical start: work out your fixed monthly costs, such as salaries, rent and commitments, and set the minimum to cover one to three months of them. Pick the higher figure if you have few customers, long collection times or a seasonal business.
The monthly routine in one hour
- Match the table's balance with the bank statement and cash box.
- Record what actually happened last month and compare it with your forecast.
- Write down the reason for the biggest gap, to improve how you forecast.
- Update the next three months.
- If any month falls below the safe line, pick one decision and name its owner and date.
If you build this table by hand from many places, it is time to review your system. How to choose is in how to choose accounting software, and ask for collections and payables by date from the system.
Your next step
Open your bank statement today, copy the template, and fill in the last actual month and the next three. Look at the first month the balance falls below the safe line, and write down what you will do now. If you need a system that gives you these numbers without manual gathering, take a look at PlanKit's accounting systems service.