How to create a cash flow forecast for your business

A cash flow forecast is one of the most important tools you can use for business planning. In 2025, with rising costs and tighter compliance deadlines, understanding exactly what cash is coming in and going out of your business is essential.

A forecast gives you a clear picture of how long your business can continue to operate at current sales levels by showing how much money you’ll have in the bank at the end of a given period. It’s not just about survival — it’s about building confidence in your numbers so you can make informed decisions about growth, payroll, tax obligations, and investment.

At First Class Accounts Ovens & Murray, we help business owners build reliable forecasts that take the stress out of cash flow management.

Why a cash flow forecast matters

A cash flow forecast gives you a clearer understanding of what’s driving revenue in your business and visibility over your expenses. With this knowledge, you can identify which costs are essential, which are flexible, and where you can make changes to improve your position.

Forecasting also allows you to model different scenarios, helping you see the outcomes of decisions before you make them. For example:

• What happens if sales dip for three months?

• How would expanding into a new channel impact your outgoings?

• Can you afford to bring on another employee, and when?

In 2025, lenders, investors, and government support programs increasingly expect to see detailed cash flow forecasts as part of their approval process. A strong plan demonstrates that you understand your numbers and have a strategy to deal with uncertainty.

If you’re applying for funding or looking to expand, First Class Accounts Ovens & Murray can help you prepare accurate forecasts that meet lender requirements.

What information do you need?

The accuracy of your cash flow forecast depends on the quality of the data you put in. While accounting software like Xero, MYOB or QuickBooks can automate parts of the process, you still need to ensure your records are up to date and accurate.

Here’s the key information to gather before you start building a forecast:

Understanding where your cash is coming from

Start with revenue from sales. Break your figures down by product or service line and across sales channels. This helps you identify your biggest income drivers. Ask yourself questions like:

• Does 80% of your revenue come from just 20% of your products or services?

• Which sales channels are the most profitable?

• Do you have a healthy balance of high-value/low-volume and low-value/high-volume sales?

Don’t forget to include other sources of income, such as government grants, tax refunds, or business investments. In 2025, many businesses are also earning income through digital platforms or subscription models. It’s important to make sure these are captured as well.

Understanding expenses, ie where is the cash going?

Your forecast should also capture all outgoing costs, such as rent, wages, supplier payments, bank fees and loan repayments, tax liabilities, utilities, and insurance. If you have a business loan, note down the repayment schedule, interest, and when the debt will be cleared.

It’s also important to include:

• Tax obligations (GST, PAYG, superannuation, company tax)

• Capital expenses (equipment, vehicles, or major purchases)

• Variable costs such as freight, raw materials, or commissions

Separating fixed and variable costs will help you understand which expenses can be adjusted if your income changes. For example, rent is fixed, but travel, marketing spend, or director’s drawings can usually be reduced if needed.

First Class Accounts Ovens & Murray can help you set up a clear expense structure so you always know what’s fixed, what’s flexible, and how to plan for tax payments on time.

Making informed decisions in your business

A reliable cash flow forecast brings all of your financial data together in one place. It shows you not only how long your business can continue at current income levels, but also gives you the confidence to make big decisions. For example, it can help you determine when to:

• Hire additional staff

• Purchase inventory or equipment

• Take advantage of a supplier discount

• Invest in marketing or expansion

Remember, a cash flow forecast is different to a budget. A budget projects income and expenses, but a forecast focuses on the timing of cash movements. For example, you may record a sale in your budget, but if the customer pays on 30-day terms, the cash may not hit your bank account until the following month.

Building confidence with cash flow

If cash flow forecasting feels overwhelming, you don’t have to manage it alone. With the right setup, you can use your accounting software alongside forecasting tools to get accurate, real-time insights.

At First Class Accounts Ovens & Murray, we work with you to create forecasts that not only show where your business stands today, but also help you plan ahead for payroll, tax, supplier payments, and growth opportunities.

Contact us today to start building a cash flow forecast that gives you clarity and confidence in your business decisions.

Forecasting FAQs

Q: What is the main purpose of a cash flow forecast?

A cash flow forecast helps you predict the money coming in and going out of your business so you can plan for expenses, payroll, and growth.

Q: How often should I update my cash flow forecast?

It’s best to update your forecast monthly. Regular updates ensure you capture seasonal income dips, upcoming tax payments, and changes in expenses.

Q: What’s the difference between a budget and a cash flow forecast?

A budget estimates income and expenses, while a cash flow forecast focuses on when money will move in and out of your bank account.

Contact us today to start building a cash flow forecast that gives you clarity and confidence in your business decisions.

Should I focus on profits or cash flow in 2025?

Turning a profit is an essential part of running any successful business. But in today’s economy, where costs are rising and margins are under pressure, focusing only on profits can be risky. 

Without reliable cash flow, even profitable businesses can quickly run into trouble. 

The real answer is balance: you need both healthy profits and steady, predictable cash flow if you want to build a stable, long-term business.

Why cash flow matters

Cash flow is the foundation that keeps your business moving. Without a consistent and predictable flow of money into the business, you can’t cover overheads, pay employees, meet supplier invoices, or manage ATO obligations such as GST, PAYG and super. 

For many business owners, cash flow is what keeps them awake at night because when cash is tight, stability is at risk.

What’s needed in 2025 is a strong focus on cash flow management alongside strategies to drive profitability. 

This combination ensures you have enough cash in the bank to meet commitments today, while still building long-term profit for growth.

Financial management challenges

Keeping on top of your finances isn’t easy, especially with the ongoing pressures of 2025. 

Compliance requirements continue to evolve, payroll accuracy matters more than ever, and operating costs still need close attention. 

Many small business owners also find the technical language of accounting confusing, which makes it harder to track performance and plan ahead. This is where expert bookkeeping support from First Class Accounts Ovens & Murray becomes invaluable.

Understanding your finances

If you want to stay in control of your financial future, you need to understand how cash flow management works. In 2025, many industries are still feeling the effects of inflation and supply chain challenges, and consumer spending remains cautious. These pressures make cash flow forecasting and planning more important than ever. Having clarity around what’s coming in, what’s going out, and when it happens gives you the confidence to make smarter business decisions.

Key things to understand about your finances

Profit is a by-product of a sustainable business

Every business owner wants to see profits, but profitability alone doesn’t guarantee long-term success. 

A company can look profitable on paper, yet still struggle to pay staff or suppliers on time. What really matters is sustainability: consistent revenues backed by a clear view of your cash position.

Cash flow keeps your business running

Revenue is important, but without cash available to cover wages, rent, superannuation and ATO payments, your business can’t function. This is why business owners are often told “cash is king”. Because it determines whether you can continue trading day-to-day. 

At First Class Accounts Ovens & Murray, we work with business owners to manage inflows and outflows so they always know where they stand.

Know your costs and overheads

The other side of cash flow is managing expenses. 

In an ideal world, inflows exceed outflows. In practice, costs creep. 

Regularly review your cost base, overheads and supplier arrangements. Use the right tools to get real-time visibility. For example, Xero connects bank feeds and provides dashboards that make it easier to spot trends early. 

Add-ons like Dext (data capture), ApprovalMax (approvals) and Calxa (reporting and cash flow forecasting) can further strengthen your processes and insights.

Actively manage your spending

Small changes can make a big difference. 

Negotiating better supplier terms, switching to more efficient business apps, or automating manual processes can all ease pressure on your cash flow. 

First Class Accounts Ovens & Murray are business app specialists helping you identify and implement the right tools for your business, saving you time and money.

Look for sensible ways to increase revenue

Boosting revenue is another lever to improve cash flow. 

This might mean running targeted sales campaigns, expanding your service offering, or improving pricing strategies. When paired with reliable bookkeeping and clear reporting, you’ll be able to see exactly how increased revenue translates into improved cash flow.

Keep cash flowing, and profits will follow

With strong cash flow, your business rests on solid financial foundations. You’ll have the resources to pay staff, meet obligations, and reinvest in growth. This stability makes profitability easier to achieve and sustain.

How First Class Accounts Ovens & Murray helps

Whether you’re starting out or have been in business for years, First Class Accounts Ovens & Murray can help you strengthen your cash flow position. 

We focus on five areas that keep your finances practical and on track:

• Cash flow confidence: Forecasts, calendars and simple dashboards so you know what’s due and when.

• Payroll, super and people payments: Accurate, compliant payroll with Single Touch Payroll, leave, entitlements and super handled correctly.

• Business app advisory and implementation: Selecting, integrating and training on tools like Xero, MYOB, QuickBooks, Dext, ApprovalMax and Calxa to streamline your processes.

• Reliable, done-for-you bookkeeping: BAS, IAS and ATO lodgements, bank reconciliations, end-of-month reporting, and catch-up work completed on time, every time.

• Real-world advice: Clear explanations of your numbers so you can make informed decisions with confidence.

It often only takes a few small changes to make a big impact. Get in touch with us today to discuss how we can help you achieve consistent cash flow and lasting profitability.

Profits or Cash flow FAQs

What’s more important: profit or cash flow?

You need both. Profit measures performance over time. Cash flow confirms you can pay bills, wages and tax on time.

Why can a profitable business still run out of money?

Profit can be tied up in debtors or stock. If cash doesn’t arrive when expenses are due, you can still face shortfalls.

How do I improve cash flow quickly?

Tighten debtor follow-up, review payment terms, schedule ATO commitments, and check subscriptions. A short forecast helps prioritise actions.

What tools help with cash flow?

Xero, and other accounting platforms, offer real-time views. Add-ons like Dext, ApprovalMax and Calxa improve accuracy, control and forecasting.

Can a bookkeeper manage payroll and ATO lodgements?

A registered BAS Agent can handle BAS, IAS and payroll obligations. First Class Accounts Ovens & Murray provides this service.

Six reasons to look at your financial reports

Taking time each month to review your financial reports is no longer optional, it’s essential for every business owner. 

With rising costs, stricter compliance requirements, and increased pressure on cash flow, having clear visibility over your numbers is one of the best tools you have to keep your business stable and growing.

If you don’t set aside time for this, it’s easy to miss early warning signs that could affect your ability to pay staff, suppliers, or even yourself.

Why reports matter

Many business owners avoid reports because they’re time-poor or they feel the numbers don’t make sense. 

That’s where having a reliable bookkeeper like First Class Accounts Ovens & Murray can make all the difference. We not only prepare the reports but also help you understand them. 

Here are six reasons why reviewing your financial reports regularly matters more than ever in 2025.

Which reports to look at

At a bare minimum, and depending on the complexity of your business, you should be looking at the following:

Profit and Loss (P&L)

As the name suggests, your P&L tells you how your business is performing over a period of time, such as a month or a financial year. In broad terms it shows the revenue that your business has generated, less the expenses for that same period. In other words, it shows how profitable your business is.

Tip: Compare this month with the same month last year and check gross margin movements. Small swings often point to pricing or cost issues that are easy to fix early.

Balance Sheet

The Balance Sheet shows the value of the business’s Assets, Liabilities and Equity.

Assets include things like money in bank accounts, Plant and Equipment, Accounts Receivable balances

Liabilities include things like Bank loans and credit cards, Accounts Payable, and Hire Purchase balances

Equity is the difference between your Assets and your Liabilities and includes Retained Earnings and Owner Funds Introduced

Tip: Lenders still assess funding applications against clean, current Balance Sheets. Keeping this reconciled monthly can make finance conversations faster. 

Accounts Receivable Ageing Report

This shows how much money is still owed to the business as at a certain date in time, and is usually segmented as to how overdue they are, or sometimes by how far past the invoice date they are. Generally, you will have Current, 30, 60 and 90 days columns.

Tip: Late payments remain a pressure point for many SMEs. Monitor 30+ day slippage and act early.

Accounts Payable Ageing Report

This report shows who the business owes money to as at a certain date in time and, like the Accounts Receivable Ageing report, is usually segmented by overdue period.

Tip: Review upcoming supplier, payroll and ATO obligations together so you can schedule payments with confidence. For payroll reporting, ensure your STP setup remains compliant.

So, why bother? Six reasons

1. Understand your business better

By looking at your Profit and Loss report monthly you will get a good picture of how your business is performing month by month and it will give you a better understanding of what makes up your profit.

It can be helpful to compare periods, or to look at a month by month P&L, so you can clearly see on one page the revenue and expenses month by month. This will help to identify trends in your data and may also highlight anomalies in coding or categorising.

First Class Accounts Ovens & Murray can walk you through your monthly reports in plain English, helping you understand your numbers so you can make informed decisions with confidence.

2. Accurate information for lending purposes

If you are applying for a loan or an overdraft, the bank or financial institution will look closely at both your Profit and Loss report and the Balance Sheet as a lot can be learned about a business by looking at these reports together.

We keep your accounts reconciled and reports up to date so you can provide lenders with accurate information whenever you need it.

3. Get paid quicker and reduce bad debts

By looking at your Accounts Receivable Aged Summary each month you can follow up with overdue accounts promptly which often results in getting paid quicker. 

The longer an overdue amount is left unpaid the higher the risk of it not being paid at all, so it is important to keep on top of this.

We can help set up automated reminders and receivables tools through trusted partner apps, so you get paid faster and improve your cash flow.

4. Better relationships with your suppliers

Assuming you are entering your supplier bills into your accounting software (recommended for most businesses to get an accurate profitability figure) your Aged Payables report will alert you to any unpaid or overdue amounts.

Supplier relationships are an important aspect of your business and paying on time is crucial to maintaining those relationships.

Our accurate reporting and scheduling support ensures supplier invoices and employee wages are paid on time, protecting relationships and trust.

5. Better cash flow

Having an accurate understanding of how much money the business is owed, and how much money the business owes, can help with cash flow planning to ensure that there is enough money when needed. 

Additionally, understanding the trends of your business, its profitability drivers, its expenses, etc., can help to plan sales and marketing campaigns so that the revenue keeps coming in.

We can prepare rolling cash flow forecasts, showing exactly what’s coming in and going out, and when. You’ll always know if you can meet payroll, super, and ATO deadlines.

6. Better decision making

Your financial reports tell the story of your business and it’s important that you understand the story that they are telling you. 

The better you understand what’s going on in your business the stronger position you will be in to make better business decisions that affect the profitability of your business and its financial viability.

Our team doesn’t just produce reports, we work with you to interpret them and guide decisions about growth, pricing, and planning.

What’s next?

If you would like to know which reports are relevant to your business, and you want to better understand what’s going on in your business, then book a time with us to go through them with you.

Your business success is important to us and we are here to help you. If you’d like hands-on support setting up monthly reporting, commentary and cash flow forecasting, book a session with First Class Accounts Ovens & Murray. We will tailor a simple reporting pack for your business.

Quick FAQs

Which financial reports should I review monthly?

Profit and Loss, Balance Sheet, Aged Receivables and Aged Payables. These four give you a clear view of profit and cash flow.

How do financial reports help cash flow?

They show what is due in and out, and when. Pair them with a forecast to plan staff, super and ATO payments.

Do I need a bookkeeper for this?

A registered BAS agent or bookkeeper ensures your reports are accurate and compliant, and can add plain-English commentary so decisions are easier. First Class Accounts Ovens & Murray can help.

How to Cut Costs and Increase Prices Without Losing Customers

Many small and medium businesses are facing tighter margins in 2025 due to rising costs, higher interest rates, and ongoing supply chain pressures. 

The more prepared you are to manage these challenges, the better placed your business will be to maintain profitability and stability.

Managing expenses in today’s environment

Managing expenses is always important, no matter the stage of your business. 

With inflation and wage pressures continuing into 2025, many business owners are reviewing how they can reduce unnecessary spending while still investing in areas that help them grow. 

At the same time, you may need to consider whether your prices still reflect the true cost of doing business. Getting this balance right can make a real difference to your cash flow and profitability.

Cash flow and systems

Cash flow is still one of the biggest challenges for small businesses. When money isn’t coming in consistently, it helps to look at both your costs and your systems. 

An inefficient process can be just as costly as an unnecessary expense. 

• Are your invoices going out on time? 

• Are supplier payments managed in a way that balances loyalty with cash flow needs?

• Do you have visibility of what’s coming in and what’s going out in the next three to six months?

If getting clients to pay on time is one of your challenges, check out our blog 6 Secrets to Getting Prompt Payment for practical tips to improve your cash flow.

Additionally, these are all areas where the right bookkeeping support can make a difference. At First Class Accounts Ovens & Murray, we work with you to put systems in place that give you a clear picture of your finances so you can make better decisions with confidence.

Smart ways to get your costs under control

Start with a cost control audit

Identify your biggest cost centres and review how you manage them. 

Payroll errors, subscription bloat, and poor stock management are common drains on business resources. As your bookkeeper we can help you review these costs regularly, so nothing slips through unnoticed.

Be aware of the bigger picture

Cutting costs too deeply can harm your business in the long run. 

Instead, track costs consistently and look for smarter ways to operate. Automating repetitive tasks, such as payroll and bank reconciliations, reduces errors and saves valuable time. 

Our team at First Class Accounts Ovens & Murray can recommend the right apps to streamline your processes and reduce waste.

Involve your team

Your team are often the first to notice inefficiencies. Bringing them into the conversation about cost management can uncover practical ideas. 

If you’re updating systems or introducing new software, make sure staff are trained and supported. We often work with businesses to not only implement new apps but also provide the training needed so staff feel confident using them.

Benchmark your business

Comparing costs with similar businesses in your industry can highlight areas for improvement. 

For example, if competitors are managing inventory with less overhead, it may be worth exploring the tools or processes they use. 

At First Class Accounts Ovens & Murray, we regularly work with clients across different industries and can provide insights into what’s working well for businesses like yours.

Seek advice

Even if you have a good sense of your cost issues, a fresh set of eyes can help. 

Talking with your bookkeeper or accountant can highlight areas you may not have considered. At First Class Accounts Ovens & Murray, we help you identify where efficiencies can be gained and ensure you’re meeting all compliance requirements while staying on top of cash flow. 

If you’d like support to review your costs, get in touch with us today.

How can I increase prices without losing customers?

Raising prices is never easy, but sometimes it’s necessary to reflect rising costs and keep your business sustainable. 

In 2025, many industries are facing price increases due to supply chain challenges, higher wages, and increased compliance costs. 

The key is clear, honest communication. Customers value transparency and are more likely to stay loyal if they understand why changes are being made.

• Update your website, social media, and any online booking systems to reflect pricing changes. Explain the reasons behind them clearly and professionally. A short post or FAQ update can go a long way in maintaining trust.

• Send an email or newsletter to your clients and suppliers, giving them notice of the change. Where possible, provide advance warning so they can adjust budgets or expectations.

• If you’re meeting clients face-to-face, let them know about pricing changes upfront. Failing to do so can damage trust and may even breach Fair Trading requirements. Make sure your staff are also aware and confident in explaining the changes when asked.

• Focus on customer experience. Train your staff to explain changes positively and professionally, reinforcing the value your business provides. A strong customer relationship often matters more than the price point itself.

• If you’re concerned about losing customers, consider phasing in increases gradually. This approach can ease the transition and give customers time to adapt. You may also want to offer additional value, such as improved service or bundled packages, to help justify the change.

Ready to make better business decisions?

If you’re unsure whether to cut costs, raise prices, or do both, we can help. 

At First Class Accounts Ovens & Murray, we work alongside you to review your numbers, streamline your processes, and provide real-world advice so you can make confident business decisions. 

Contact us today to book a chat about your next steps.

Frequently asked questions about cutting costs and raising prices

Q: What’s the best way to reduce business costs in 2025?
A: Start with a cost control audit, automate repetitive tasks, and review subscriptions or overheads. Bookkeepers can help track costs and identify savings.

Q: How do I raise prices without losing customers?
A: Be transparent, communicate changes clearly across all channels, give advance notice, and reinforce the value you provide to customers.

Q: Why is cash flow management important for small businesses?
A: Poor cash flow is one of the main reasons small businesses struggle. Effective cash flow planning ensures bills, wages, and suppliers are paid on time.

6 secrets to getting prompt payment

Late payments continue to be one of the biggest challenges for small businesses. 

In 2025, reports show businesses are still experiencing delays that impact cash flow and create unnecessary stress. If this sounds familiar, the good news is there are simple, practical steps you can take to improve how quickly you get paid.

At First Class Accounts Ovens & Murray, we know that healthy cash flow is the backbone of a successful business. Here are six secrets you can put into action right now to help get paid faster.

1. Invoice without delay

Your customer can’t pay until they receive your invoice, so don’t put it off. Send invoices as soon as work is complete or goods are delivered. Customers are most open to paying while the job is fresh in their mind, and it shows you’re organised and professional.

In 2025, many accounting systems, such as Xero, allow you to set up automated invoicing. That means invoices are created and sent without delay, removing the risk of human error or forgetfulness.

Pro tip: Automating your invoicing through the right software not only saves time but also improves cash flow consistency. Talk to us about which option best suits your business.

2. Include all the information

An invoice missing key details is one of the most common reasons payments are delayed. Always include:

• a clear description of the work or product

• the date it was delivered

• the agreed price and tax details

• purchase order numbers (if required)

• your payment terms and methods

• the due date, clearly displayed

Some clients, especially larger organisations, have very strict invoicing requirements. If your invoice doesn’t meet them, payment can be held up for weeks. By checking in advance what information they need, you reduce unnecessary delays.

Pro tip: Using bookkeeping software can help you create invoice templates that meet your customers’ requirements every time. First Class Accounts Ovens & Murray can set these up for you so you’re confident every invoice is correct.

3. Ask for prompt payment

Long payment terms are no longer the norm. Many businesses now set 7–14 day payment terms, and some industries even expect payment within 48 hours. By clearly setting your terms up front, you set the standard for how quickly clients should pay.

In 2025, with faster payment technology available, there’s little reason to offer 30-day terms unless your industry requires it. Shorter terms not only speed up cash flow but also reduce the need for chasing overdue invoices.

Pro tip: Review your payment terms today. Even shifting from 30 days to 14 days can make a big difference to your cash flow over the year.

4. Be easy to pay

Customers pay faster when the process is simple. The more payment options you offer, the easier it is for them to clear your invoice quickly. In 2025, this includes:

• credit card payments

• direct debit or bank transfer

• PayPal, Stripe, or similar payment gateways

• instant pay links embedded in invoices

When your invoice lands in their inbox with a clickable “Pay Now” button, there’s no excuse for delay.

Pro tip: Many modern accounting platforms integrate payment options directly into invoices. First Class Accounts Ovens & Murray can help set this up so your clients can pay you with one click.

5. Chase payments

Sending an invoice is just the first step. Following up is essential. Most businesses don’t mean to pay late, invoices often simply get lost or forgotten in busy workflows.

In 2025, automated reminders can help reduce the awkwardness of chasing payments. You can set polite reminder emails to go out before the due date, on the due date, and if payment is overdue. If the invoice still isn’t paid, a personal phone call is often the fastest way to resolve it.

Pro tip: First Class Accounts Ovens & Murray can set up reminder systems tailored to your clients and industry so chasing payments becomes part of your process, not an afterthought.

6. Talk to us about your invoicing system

Managing invoices and cash flow doesn’t need to be stressful or time-consuming. At First Class Accounts Ovens & Murray, we specialise in helping businesses streamline their bookkeeping processes, set up automated invoicing systems, and stay on top of payments.

If late payments are keeping you up at night, let’s fix it. 

Contact First Class Accounts Ovens & Murray today and find out how we can help you get paid faster and keep your cash flow healthy.

FAQs about getting paid faster

Q: What is the fastest way to get paid by clients?
The fastest way to get paid is to send invoices immediately, make it easy for clients to pay with multiple payment options, and set shorter payment terms such as 7–14 days.

Q: How can I reduce late payments in my business?
You can reduce late payments by automating invoicing, including all required details on invoices, sending payment reminders, and following up quickly when invoices become overdue.

Q: What payment terms should small businesses use in 2025?
Many small businesses are now using 7–14 day payment terms instead of the traditional 30 days. Shorter terms encourage prompt payment and improve cash flow.

Q: How do bookkeeping systems help with getting paid faster?
Modern bookkeeping systems like Xero, MYOB, or QuickBooks can automate invoicing, add “Pay Now” buttons to invoices, and send automatic payment reminders, making it easier for clients to pay on time.

Yes. First Class Accounts Ovens & Murray can help you set up automated invoicing and reminders tailored to your business so you get paid faster and improve your cash flow.

What’s in the forecast?

When you’re heading out for a fishing trip or a hike, you check the weather forecast first. It’s common sense. You want to know what’s coming so you’re prepared.

It’s the same with running your business.

Cashflow is your weather. And your business forecast tells you what’s ahead, sunshine or storms, based on the direction you’re heading.

But unlike the weather, if your business forecast is looking grim, you can change it. You can adjust the sails, shift course, or even rework your entire route. That’s the real value of forecasting. It gives you time to act.

What your business forecast will tell you

A good forecast isn’t just a guess. It’s a tool that pulls together your sales pipeline, expenses, planned investments, and obligations to give you a clear picture of what’s coming.

It can help you:

1. Know if you’ve got enough sales in the pipeline to hit your profit targets

Your sales forecast is more than just a list of potential deals. It’s about tracking what’s likely to convert, when, and how that stacks up against your goals. If you’re falling short, your forecast gives you time to ramp up marketing, re-engage leads, or rethink your offer.

2. Check if your margins are where they need to be

It’s not just about what you sell, it’s what you keep. Are your costs creeping up? Is pricing aligned with the value you’re delivering? Your forecast helps you assess whether your margin supports your profitability targets.

3. Spot if you need to review pricing or production processes

Are you undercharging? Is it taking too long to deliver your service or produce your goods? Forecasting highlights gaps in revenue versus effort, helping you make data-driven decisions about pricing or process improvements.

4. See if your business is running efficiently

Forecasting isn't just about revenue. It can help you assess how much you’re spending to earn that revenue. Are admin or overhead costs blowing out? Is it time to automate or outsource? Forecasting helps pinpoint where efficiency gains could be made.

5. Identify opportunities to reduce costs

Looking at your forecasted outgoings across the year helps you identify recurring expenses that can be reduced, renegotiated, or removed altogether. You’ll see where you’re overspending and where smarter choices can be made.

6. Decide if you should invest more to get a better return

Sometimes spending more is the right move. Whether it's hiring staff, upgrading tools, or investing in marketing, your forecast shows whether that investment is likely to pay off, and how soon. It helps take the guesswork out of big decisions.

7. Know how much to set aside for tax

Surprise tax bills can crush your cash flow. Your forecast should include projected tax liabilities, so you’re not caught off guard. Planning ahead means avoiding panic when it comes time to pay the ATO.

8. Understand how much you can draw from the business

It’s tempting to pull more from the business when sales are high, but will that leave you short next month? A cashflow forecast helps you make informed decisions about your drawings so you’re not undermining your business’s financial health.

9. Plan your debt repayments

Whether it’s loans, credit cards, or equipment finance, your forecast helps you plan repayments without hurting cashflow. You’ll know what you can afford, when you can afford it, and how to manage it without stress.

10. Make sure you’re meeting bank and lender requirements

If you’ve got finance in place, your lender may have covenants or minimum financial thresholds you need to meet. A forecast helps ensure you stay compliant and avoid breaching any conditions – which could impact your funding.

Forecasting helps you take control

The biggest difference between a business forecast and a weather forecast is control.

You can’t stop a storm, but if your business is heading for a rough patch, you can take action. You can boost your sales efforts, reduce expenses, adjust staffing levels, delay non-essential spending, or seek funding in advance.

Your forecast doesn’t just tell you what’s coming. It gives you the power to prepare, adjust and keep things steady.

That’s why a forecast should never be a one-off document that sits in a drawer. It should be a living tool, reviewed regularly (ideally monthly) alongside your actual performance, to make sure you're still on track.

Don’t wait to get soaked – check your forecast now

Running a business without a forecast is like heading out on the water without checking the radar.

At First Class Accounts Ovens & Murray, we build easy-to-understand cashflow forecasts tailored to your business. We help you break it down, so you know what to expect, and what to do if things change.

Need help forecasting? We can set up your budget, map out expected income and expenses, and even run ‘what if’ scenarios so you’re better prepared for anything that comes your way.

We’ll also help you interpret the numbers, spot risks, and identify opportunities, all in plain language, with support when you need it.

Talk to First Class Accounts Ovens & Murray about getting your forecast sorted for 2025-26.

We’ll help you take control of your cashflow, reduce stress, and make confident decisions for the year ahead.

“Planning is bringing the future into the present so that you can do something about it now.” – Alan Lakein

We’re here to help you every step of the way. Get in touch. Let’s make 2025-26 your most prepared year yet.

Understanding Your Cashflow Statement

When it comes to knowing how your business is really performing, understanding your cashflow statement is a must. It shows exactly how your business has generated and used cash (and cash equivalents) over a specific period. And that gives you valuable insight into what’s going on behind the scenes.

Alongside your profit and loss statement and balance sheet, the cashflow statement rounds out the full picture of your financial position. And once you understand how to read and use it, you’ll feel more confident in your day-to-day decisions.

At First Class Accounts Ovens & Murray, we prepare clear, easy-to-follow reports for our clients, so you’re not left guessing where the cash is coming from or where it’s going.

What your cashflow statement actually shows

The cashflow statement takes information from your other reports, specifically your profit and loss statement and balance sheet, and pulls it into one place to reflect your current cash position.

The difference is that this report is presented on a cash basis, not accrual. That means it focuses on actual money in and out of the bank during the reporting period, rather than invoices issued or received. It adjusts for movements in asset and liability accounts so you can see your real-world financial activity.

If your financial reports are managed by First Class Accounts Ovens & Murray, you’ll know your cashflow data is accurate, up to date, and explained in a way that actually makes sense. We make sure you know how much cash you have available to spend, not just what’s on paper.

Breaking it down: where the money flows

Your cashflow statement is usually divided into three areas:

Operating activities cover everyday business operations. This includes income from customers, supplier payments, wages, tax, super, and regular expenses like rent and software. It’s the day-to-day engine room of your business. 

At First Class Accounts Ovens & Murray, we manage these processes for many clients, such as payroll, so your operations keep running smoothly.

Investing activities reflect money spent or earned from buying and selling things like vehicles, equipment, or other long-term assets. Security deposits and dividends received also sit here. If you’re making big investments or planning asset purchases, your cashflow report will show how they impact your bank balance.

Financing activities include things like loans, equity contributions, and repayments. If your business has borrowed money, repaid debt, or paid out dividends, those transactions are recorded in this section. 

Extra information that matters

Formal financial reports sometimes include “notes to the financial statements.” These explain unusual or significant events that affected your business but didn’t involve cash changing hands, things like asset revaluations, depreciation, or stock adjustments.

We ensure these are clearly documented if needed, especially when working alongside your accountant to prepare reports for lenders or investors.

Why it’s worth understanding

When you look at your cashflow statement, you're not just seeing a number. You’re seeing how well your business can meet its obligations, whether your operations are sustainable, and what’s possible in the short and long term.

It helps you answer questions like:

• Can I cover my bills this month?

• How strong is my overall cash position?

• Are my operations generating enough cash to grow?

• How do my income and actual cash movements compare?

Where your profit and loss shows performance over time and your balance sheet shows position at a point in time, your cashflow statement reveals the story of your financial movements and whether they’re moving in the right direction.

And if they’re not? That’s where we come in. First Class Accounts Ovens & Murray helps identify the gaps, streamline your processes, and put cashflow planning strategies in place. We also help you prepare for seasonal dips, avoid unnecessary cash crunches, and keep your team and suppliers paid on time.

Want to feel more in control of your cash?

You’re not alone. Most business owners we work with know their business is doing OK, but they’re not always sure where the money’s going, or what’s coming next.

Understanding your cashflow statement gives you back that clarity.

If you’re ready to feel more confident about your financial position and future outlook, let’s talk. First Class Accounts Ovens & Murray offers practical support that helps you get clear on your numbers, stay in control of your operations, and plan with confidence.