Quick Definition
Cash flow forecasting is the process of estimating future cash balance over a defined horizon (such as 30, 60, or 90 days) by analyzing recurring revenue streams, operational expenses, accounts receivable aging, and upcoming vendor payables.
Essential Cash Flow Formulas
Monthly Burn Rate
Net Burn = Total Monthly Expenses - Total Monthly Revenue
Measures the net rate at which a company consumes cash each month when expenses exceed income.
Cash Runway
Runway (Months) = Available Liquid Cash / Net Monthly Burn
Calculates how many months of operational runway remain before additional capital or cash influx is required.
How CFOFlow Automates 90-Day Cash Forecasting
Data Ingestion
Connect bank accounts or import CSV bank statements securely.
Pattern Categorization
Algorithms isolate recurring vendor subscriptions, payroll schedules, and seasonal revenue streams.
AR & AP Ledger Integration
Outstanding client invoices and vendor bills are factored in based on due dates and probability scores.
Predictive Projections
Generates daily rolling cash projections 90 days out, highlighting potential deficit warnings automatically.
Frequently Asked Questions
What is cash flow forecasting?
Cash flow forecasting is the financial practice of estimating future cash inflows and outflows over a specific timeframe—typically 30, 60, or 90 days. It allows business leaders to predict liquid cash balances, detect upcoming cash deficits early, and make informed capital decisions.
What is the difference between cash flow and profit?
Profit is an accounting measure (Revenue minus Expenses) reported on an accrual basis, while Cash Flow tracks actual liquid money entering and leaving bank accounts. A company can be profitable on paper but run out of cash if client invoices remain unpaid.
What is cash runway and how is it calculated?
Cash runway is the amount of time (in months) a business can operate before running out of liquid cash. It is calculated as: Runway (Months) = Total Liquid Cash / Net Monthly Burn Rate.
What is a 13-week cash flow forecast?
A 13-week cash flow forecast is a rolling 90-day projection standard used by CFOs and financial restructuring experts to track weekly cash receipts and disbursements with high operational accuracy.
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