Why cash flow, not profit, keeps you open
Profit and cash are not the same thing, and confusing them is one of the most common reasons otherwise healthy businesses fail. You can be profitable on paper yet run out of cash because customers pay late, stock is bought upfront, or a big tax bill lands all at once. A cash-flow forecast projects the actual money in your bank account over the coming months, so you can see a shortfall before it becomes a crisis.
This forecaster works month by month. You enter your opening cash balance and, for each month, your expected cash in (sales receipts, other income) and cash out (rent, wages, stock, tax, loan repayments). It carries the closing balance of one month into the next, showing the running balance across six months. The moment a projected balance turns negative, you know exactly when and how large the gap is — and how much time you have to act.
Forecasting early gives you options that panic does not: chasing invoices sooner, timing a purchase for a stronger month, arranging finance before you need it, or trimming a cost. It also shows your runway — how many months of expenses your current cash covers — which is essential if sales dip. Update the forecast as real figures come in and it becomes a living early-warning system rather than a guess.
The forecast is only as good as its inputs, so be realistic about when customers actually pay, not when you invoice. Tallium builds a live cash-flow view from your real invoices, bills and bank activity, forecasting your position automatically instead of relying on a spreadsheet you have to maintain by hand.
Frequently asked questions
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