What a Cash Flow Projection Is
A cash flow projection is a forward-looking estimate of how your cash balance will change over time. Instead of focusing on accounting profit, it tracks actual cash moving into and out of your bank account. This makes cash flow projections essential for startups, small businesses, freelancers, property owners, and households that need to plan around real payment timing—payroll, rent, vendor bills, taxes, debt service, and seasonal revenue.
Even profitable businesses can face cash shortages. If customers pay late, inventory must be purchased upfront, or expenses arrive before revenue is collected, cash can become tight quickly. A Cash Flow Projection Calculator makes these dynamics visible by creating a month-by-month schedule of income, expenses, and ending balances. The goal is not to predict the future perfectly, but to identify risk periods early and make decisions with margin.
Cash Flow vs Profit: Why Timing Matters
Profit is calculated on an accrual basis for many businesses: revenue is recognized when earned and expenses when incurred. Cash flow is different. It answers one question: “How much cash will I have available?” A company might show profit on paper while cash decreases because receivables are rising, inventory is growing, or loan principal payments are due. Conversely, a business might show low profit while cash increases because it received upfront payments or deferred expenses.
For planning and survival, cash matters more than accounting profit. Cash flow projections help you see whether your operating plan is sustainable without emergency funding or disruptive cost cutting.
Key Inputs That Drive Cash Flow Projections
A good projection starts with realistic assumptions. The most important inputs are:
- Starting cash balance: your cash today, including bank balances and liquid reserves.
- Recurring income: salary, sales, subscriptions, service retainers, rent income, or contract payments.
- Recurring expenses: rent, payroll, software subscriptions, utilities, insurance, and debt payments.
- One-time events: tax payments, annual renewals, equipment purchases, or a planned marketing campaign.
- Growth assumptions: expected changes in income and expenses over time.
- Minimum threshold: a safety buffer you want to keep in cash.
How This Cash Flow Projection Calculator Works
This tool models cash month by month over your selected projection period. You add income and expense items with frequencies (monthly, quarterly, yearly, or one-time). For each month, the calculator totals income and expenses, computes net cash flow, and updates the ending cash balance.
You can also apply monthly growth rates to income and expenses. For example, revenue may grow by 0.30% per month while expenses grow by 0.20% per month. These assumptions help approximate inflation, pricing power, headcount growth, churn, or seasonal expansion. Because growth assumptions are uncertain, the scenario tab exists to test optimistic and conservative cases without rewriting your entire model.
Runway and Burn Rate
Startups and project-based businesses often measure “runway”—how long cash will last before dropping below a minimum threshold. When net cash flow is negative on average, that negative amount is called burn. Burn rate is commonly expressed as average monthly net outflow. This calculator estimates:
- Average monthly burn across months with net outflow (expenses exceed income).
- Runway in months until cash first falls below your chosen threshold.
These metrics help you plan funding needs, decide when to cut costs, and understand whether growth is outpacing spend.
Why One-Time Events Can Break a Plan
Many budgets look healthy until a large one-time expense hits: annual insurance, tax settlements, equipment replacement, or a major customer refund. One-time events are exactly what cash flow projections are built for. In the items tab, add one-time expenses or income events and place them at the correct offset month so the schedule shows the real impact on cash.
If your cash dips below threshold in one specific month, you can plan around it—delay discretionary spending, adjust payment terms, secure a short-term credit facility, or build a reserve in advance.
Scenario Planning: Base, Optimistic, Conservative, and Shock Months
Scenario planning turns projections into a decision tool. A base case reflects your best estimate. An optimistic case might increase income and slow expense growth. A conservative case might reduce income and increase expenses. The shock month option is useful for testing resilience against a single unexpected event—a large repair, a delayed receivable, or an emergency purchase.
The goal is to avoid planning with one fragile number. If your plan only works under optimistic assumptions, it may not be resilient. If it works under conservative assumptions, you have margin.
How to Use the Projection Schedule
The schedule tab produces a clear month-by-month table showing beginning balance, income, expenses, net cash flow, and ending balance. This is where cash flow planning becomes actionable. Look for:
- Months where ending cash approaches your threshold
- Periods with negative net cash flow that create sustained drawdown
- Seasonal patterns (higher income or higher expenses in specific quarters)
- Whether growth trends improve or worsen runway over time
If you need deeper analysis, export the schedule to CSV and model alternative payment timing, delayed receivables, or changes in pricing and headcount.
Limitations and Practical Tips
This calculator is cash-based and intentionally flexible. It does not enforce accounting rules or automatically model receivables, payables, inventory cycles, or tax laws. You can approximate those effects by adding items representing expected collections, payment delays, debt draws, or repayments. For higher accuracy, base your recurring inputs on historical averages and use conservative assumptions for growth.
A practical approach is to treat projections as living models. Update them monthly with actual numbers, compare forecast vs reality, and refine assumptions over time. The goal is not perfect prediction—it is earlier insight and better decision-making.
Final Thoughts
Cash flow is the oxygen of every plan. A Cash Flow Projection Calculator helps you turn income and expense assumptions into a schedule that reveals runway, burn, and risk periods. By modeling recurring items, one-time events, and scenarios, you can plan ahead, reduce surprises, and build financial resilience for your business or personal budget.
FAQ
Cash Flow Projection Calculator – Frequently Asked Questions
Answers about cash flow forecasting, runway, burn rate, and scenario planning.
A cash flow projection calculator forecasts future cash balances by modeling income and expenses over time. It helps estimate net cash flow, ending balance, runway, and periods where cash may go negative.
Profit is an accounting measure (revenue minus expenses) while cash flow tracks when money actually moves in and out. A business can be profitable but still run out of cash due to timing, receivables, or debt payments.
They are estimates based on assumptions. Accuracy improves when you use real historical averages, conservative growth rates, and include one-time events like taxes, renewals, or major purchases.
Runway is how long your cash balance can last before hitting zero (or a chosen minimum) given your projected net cash flow. It is commonly used by startups to understand funding needs.
Yes. This tool supports one-time items and recurring items with different frequencies so you can model irregular bills, annual renewals, bonuses, or planned investments.
Burn rate is the average monthly net cash outflow when expenses exceed income. This calculator estimates burn rate from your projected schedule, typically over the projection period or the months with negative net cash flow.
Yes. You can export the monthly cash flow schedule to CSV for spreadsheet analysis, budgeting, or investor reporting.
You can model financing as income (draws) and expenses (repayments/interest) using one-time or recurring items. The calculator is cash-based and does not enforce accounting classifications.
Create a base case, then test optimistic and conservative assumptions by adjusting growth rates, payment delays, or expense increases. Compare ending balances, runway, and the months where cash becomes tight.