Treasury
82% of businesses that fail do so for lack of cash, not profitability. Learn to project your cash flow over 90 days and avoid it.
Runway, P&L, treasury and CFO advisory in real time. No Excel. No headaches.
Create a free account82% of small businesses that fail do not fail because they are unprofitable, but because they run out of cash. The difference between surviving and closing down is often having a 90-day cash flow forecast. Today we will teach you how to build one.
A projected cash flow is not an accounting report. It is a survival tool. It tells you how much money you will have in the bank on each of the next 90 days — not how much you invoiced, nor how much you will eventually collect, but how much will actually be in your account.
It is a weekly (or daily) projection of cash inflows and outflows over the next 3 months. It answers two key questions:
If the answer to the second one scares you, you have time (90 days) to do something about it: speed up collections, delay payments, get credit, cut expenses.
A common mistake is thinking that if your P&L is positive, you have no cash problems. False. A profitable company can go under for lack of liquidity.
Example: you invoice $50,000 in January with 90-day payment terms. On your January P&L it shows up as revenue. But the actual money does not arrive until April. Meanwhile, you have to pay salaries in January, February and March with cash you do not have.
The P&L tells you whether you are profitable. Cash flow tells you whether you are alive.
Start with your current cash: how much you have TODAY in the bank, to the cent. No promises, no pending collections. Only what is available.
List every issued invoice still pending collection, assigning each one to the week you realistically expect to collect it. Not when the client "should" pay you, but when they actually do, based on their track record.
Also add recurring revenue (subscriptions, fixed contracts) on their collection dates. Do not include hypothetical sales or pipeline opportunities that are not yet signed.
List every payment you absolutely must make over the next 90 days:
Estimate expenses that vary: marketing, commissions, logistics, inventory purchases. Use the average of the last 3 months as a baseline.
For each week in the period:
One week's closing balance is the next week's opening balance. That is how you carry the cash forward week by week.
Once it is built, look for these things:
Which week has the least cash, and how much is it? If at any point you drop below 1 month of operating expenses, you are in the risk zone. If the balance goes negative, you are in a crisis and need to act NOW.
Is there a week when a lot of payments fall due at once? Do you depend on one specific client paying on time? Those concentrations are time bombs.
Build two versions: optimistic (all clients pay on time) and pessimistic (your main clients pay 30 days late). If the pessimistic one goes negative, you have a structural problem, not a one-off problem.
If your forecast shows trouble, you have these levers, in order of speed:
Pause hiring, reduce non-critical marketing, renegotiate leadership salaries. It hurts, but it is better than closing down.
"My client X always pays in 30 days" — until they do not. Use the worst real track record you have, not the theoretical one.
Sales tax, insurance, annual licenses. Mark every date of the year on a calendar and review it each week.
A forecast from a month ago is already obsolete. Cash flow should be updated weekly with the real data as it comes in.
Building a 90-day cash flow forecast is not glamorous, but it is probably the highest-ROI activity you can do as a founder or small business owner. It protects you from the surprise that kills companies: running out of money without realizing it.
If you do it by hand in Excel, set aside 2 hours every Monday. Or if you want it to update itself as you record transactions, use the Treasury module in Hayes Strategic, designed for exactly this.