When will my business run out of cash?
Forecast daily, on how clients actually pay rather than on the terms they agreed, and subtract money that is not yours. Client deposits for costs not yet spent and tax collected and not yet remitted sit in the same balance as your own cash, and separating them is frequently the difference between eleven weeks of runway and six.
Section 01
Measure each client, not the average
Payment behaviour is not distributed around a mean. It is a cluster who pay on time and a few who do not, and the average sits in a gap where no client lives.
Give each client their own distribution and rank by revenue at risk. The useful output is which clients, not what average.
Two clients on 30-day terms paying at 74 and 61 days were 38% of revenue and 100% of the days one worked example spent overdrawn.
Section 02
Take out the money that is not yours
Deposits held against costs not yet incurred, and sales tax collected and not yet paid, are liabilities sitting in a current account looking like cash.
Spending against them works until the quarter ends. Report the bank balance and the available figure side by side so the size of the correction is visible rather than argued about.
Section 03
Forecast days, not months
A month-end balance can be healthy in a month that went below zero on the fourteenth, and overdraft fees and bounced payments happen on days.
Project a daily balance and name the dates. Keep anything you added by hand, an expected contract, a planned hire, listed separately from anything measured, so the reader can see which part of the line is evidence.
Section 04
What to upload
Bank statements covering enough history to show the seasonal shape, outstanding invoices with dates and amounts, and the commitments you already know about: payroll, tax, rent, renewals.
You do not need to categorise anything first, and nothing here will categorise it for you either. An existing category column is used as it stands, and where one is absent the figures rest on dates, amounts and descriptions.
See it on a real project
Two clients, 38% of revenue, accounted for every one of the 38 overdrawn days.
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