Introduction to this document

Business plan budget cash flow

It’s often left to you to understand and monitor the most critical factor for a new business venture - cash flow! Working capital is a key part of a new business’s plan because small changes in sales demand can have a disproportionate impact on cash.

Working capital

Prepare a likely and worst case scenario Business Plan Budget Cash Flow to identify any times when there could be a funding shortfall. Base the cash flow on the profit and loss account from your Business Plan Budget Workbook with relevant working capital assumptions - for example, days sales outstanding. So if a sale is made in one month and you have 30-day payment terms, the cash flow should record the cash being received in the following month.