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you may need to cover but that after that a

the gap between your month’s credit is
income and your avaliable.

Cashflow forecast expenses – as you can There are
This shows the see, by January our some further

actual movement tradesman or woman differences between

into and out of your has paid out £3,878 the profit and loss,

business account. It more than he or she has and cashflow

thus takes full received. forecasts.

account of the fact For -----------------------

that you may often simplicity’s sake, we Purchase of equip-

not be paid have now assumed ment – the cost of

immediately for that, with sales, half purchasing equip-

work done – and, the money is received ment should be shown

corres-pondingly, imme-diately but the in your cash-flow

that you may not second half only in the forecast.

have to pay following month. For

immediately for example, the August

things you acquire. income figure of £875

relates to 50% of

August sales (£500

cash) plus the credit
Hire purchase
element of July sales
repayment on the van
(£375).

We have also are shown in the
One main use
assumed that, in the cashflow fore-cast
of the cashflow
(although in the profit
first three months, the
forecast is to establish
and loss forecast only
cost of materials must
how much finance
the interest
be paid immediately 12