Forecast first, then borrow: a step-by-step forecast built on a dental office's lab bills, a 13-week table for a home builder's materials orders, and cash-flow steps for a consulting firm with a tax bill due.
How to prepare a cash flow forecast, worked through a Carmel, IN dental office's lab bills
A cash flow forecast lists money in and money out by week or month, in the order it moves through the bank account rather than when it is earned or billed. Illustration only, invented figures: a Carmel, IN dental office sends crowns, bridges and night guards to an outside lab and pays the lab's statement once a month.
- Start from today's bank balance, not from last month's profit.
- List money in by the week it lands: insurer payments and patient payments on separate lines, since they arrive on different timetables.
- Put fixed costs on their due dates: payroll every other Friday, rent on the first, software and insurance on their billing days.
- Place lab bills where they are paid, not where the work was done. Here, 22 crowns at an invented lab fee of $289 each make a $6,358 statement due in the middle of the month, for work delivered the month before.
- Add the one-time items: an equipment payment, a tax bill, a deposit on a new chair.
- Subtract week by week and mark the smallest balance; that week, not the monthly total, sizes any credit line or loan request.
If that smallest balance falls under the cushion the office wants to keep, the difference is the amount to ask about, and the forecast is the document that explains it.
A 13-week cash flow forecast for a Carmel, IN home builder buying materials
Illustration only, invented figures: a Carmel, IN home builder starts the quarter with $40,900, pays $6,850 of payroll every other week and $1,150 of weekly overhead, orders materials in weeks 2, 6 and 10, and collects agreed stage payments from homeowners in weeks 4, 8 and 12.
| Week | Stage payments in | Materials | Payroll | Overhead | Ending balance |
|---|---|---|---|---|---|
| Week 1 | - | - | $6,850 | $1,150 | $32,900 |
| Week 2 | - | $12,300 | - | $1,150 | $19,450 |
| Week 3 | - | - | $6,850 | $1,150 | $11,450 |
| Week 4 | $27,500 | - | - | $1,150 | $37,800 |
| Week 5 | - | - | $6,850 | $1,150 | $29,800 |
| Week 6 | - | $16,800 | - | $1,150 | $11,850 |
| Week 7 | - | - | $6,850 | $1,150 | $3,850 |
| Week 8 | $30,200 | - | - | $1,150 | $32,900 |
| Week 9 | - | - | $6,850 | $1,150 | $24,900 |
| Week 10 | - | $13,400 | - | $1,150 | $10,350 |
| Week 11 | - | - | $6,850 | $1,150 | $2,350 |
| Week 12 | $25,900 | - | - | $1,150 | $27,100 |
| Week 13 | - | - | $6,850 | $1,150 | $19,100 |
The balance never goes negative, but it sinks to $2,350 in week 11 and sits under a $5,000 cushion in weeks 7 and 11. An invented $12,000 draw on a business line of credit taken with each of the materials orders in weeks 6 and 10, and paid back when the next stage payment lands 14 days later, would keep the cushion both times. At an invented annual rate of 12.85%, the interest for each draw's 14 days comes to $59.15, or $118.30 for the two (our arithmetic). With no draws the quarter would end at $19,100; with both draws it ends at $18,981.70 once their $118.30 of interest is paid (our arithmetic).
How can a business improve cash flow? A Hamilton County, IN consulting firm with a tax bill ahead
Improving cash flow means bringing money in sooner, paying it out later, or tying less of it up; none of these changes what a firm earns. Illustration only, invented figures: a Hamilton County, IN consulting firm has an $11,400 tax bill due in 13 weeks.
- Set the bill aside week by week: $877 a week for 13 weeks covers $11,400 with $1 to spare (our arithmetic).
- Bill at milestones instead of at the end of a project, so a three-month engagement pays in three parts.
- Ask for a retainer or a first-phase payment when a new engagement is signed.
- Set subcontractor due dates after the client's payment date where the subcontract allows it.
- Chase invoices at 30 days rather than waiting for 60; the receivables aging report shows which ones.
- Keep a credit line for the weeks the forecast still comes up short, drawn for the gap and paid down when invoices clear.
The order matters: the first five cost attention, and the last one costs interest, so it covers only what the others cannot.
Supplier payments and the other costs the Carmel, IN articles work through
The articles on this blog each take one trade or one purchase in Carmel, IN and work through the cost, the timing and the funding type that fits:
- Funding a fifth dental operatory: the chair, light and intraoral imaging, financed whole or chair-only, and the claim wait before the new room's insurance payments arrive.
- Physician practice funding: an exam room on equipment financing and a medical assistant's pay on a credit line, then the two swapped side by side.
- Salon suite and spa loans: equipping rented hair, spa and nail suites, cash or a small loan, with pedicure plumbing left to property work outside this site.
- Studio and gym funding: a Pilates studio filling a second room with reformers, the classes that cover the payment, and a used lot.
- Buying a firm or practice: a tax and bookkeeping firm purchase with a retention holdback, fee records and payroll after closing, with any building outside the deal.
- A second franchise location: a second chiropractic clinic's budget split across equipment financing, a term loan and the first clinic's cash.
Supplier payments run through several of them: the operatory equipment quote, a color and retail product order for a salon suite, used reformers bought from another studio. Each article works its own invented example and links the product pages it relies on.
By Meadowleaf Finance · Updated