what is meant by cash flow forecasting??
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Answer:
Definition of cash flow forecast
A cash flow forecast is a plan that shows how much money a business expects to receive in, and pay out, over a given period of time.
The business will usually start by planning how much it expects to earn in sales, then how much it expects to spend in day-to-day running costs, and finally how much it expects to receive from other sources (such as a bank loan) and pay for other costs (such as buying new equipment). Check out our article on how to make a cash flow forecast for more information on the process and benefits of financial forecasting for small businesses.
A cash flow forecast will not match a profit forecast because profit is based on when income is earned and when costs are incurred, whereas a cash flow forecast is based on when income is received and costs are paid for.
Positive and negative cash flow
If a business expects to receive more than it spends, it is said to be cash positive, or to have positive cash flow. If it expects to spend more than it earns, it is said to be cash negative, or to have a negative cash flow.
How to keep track of your business's cash flow
As tracking cash flow is a top priority for any business, FreeAgent's cash flow view gives you a monthly snapshot of the money coming in and going out of your business, so you know at a glance if you're making or burning cash.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.
Answer:
dear it shows the progress and profit and the loss of companies by the chat hope it help u