Cash flow is not profit
A profitable business can run out of cash: inventory is bought in January, sold in March, paid for in April. The forecast tracks the bank balance, which is the only thing that determines whether you can pay Friday's payroll.
Why the lowest balance matters most
The ending balance can look healthy while a February dip goes negative. The tool reports the lowest point and which month it lands in — that is where you need a credit line, not the year-end figure.
Building a real forecast
- Use collections timing, not invoice dates — 30-day terms mean cash a month later
- Model inventory purchases as lumpy, not smooth
- Include quarterly tax payments and annual insurance in their actual months
- Run a downside case at 70% of planned revenue
What to do with a negative month
Three levers: accelerate collections (deposits, card-on-file), delay outflows (supplier terms, lease timing), or arrange a credit line before you need it — banks lend to businesses that do not urgently need money.
Frequently Asked Questions
How many months should I forecast?
Twelve minimum; 13 is common to see the same month year over year.
Should I include owner draws?
Yes — they are cash out, even though they are not an expense.
Why does my forecast differ from the P&L?
Timing: revenue recognition, inventory purchases and tax payments hit cash at different moments.
Assumptions & disclaimer
Results are estimates for planning. Fee schedules, tax brackets and deduction limits change; confirm current figures with the marketplace, the IRS or a qualified accountant before making decisions. Nothing here is financial, tax or legal advice.
Privacy & Your Data
BizCalcTool runs entirely in your browser. The figures you enter are never uploaded, stored or shared — there is no backend to send them to.