Cash Flow Toolkit
See where your cash goes, forecast the next 13 weeks, build a cash cushion, and get paid faster, with notes for your type of business and AI prompts that build a forecast around your numbers.
Tailor this toolkit to your business
Cash flow is not the same as profit
Your profit and loss statement records a sale when you earn it. Your bank account records it when the customer pays. The gap between those two moments is where small businesses get squeezed: rent, payroll, and suppliers want cash on their schedule, not your customers' schedule.
A business can be growing, profitable, and still unable to make payroll on Friday. Growth often makes it worse, because you pay for materials and labor before the bigger orders pay you.
The three kinds of cash movement
| Type | What it includes | Healthy sign |
|---|---|---|
| Operating | Customer payments in; rent, payroll, supplies, taxes out | Money in from operations covers money out most months |
| Investing | Equipment, vehicles, a build-out, software you buy outright | Planned in advance and matched to cash on hand or a loan |
| Financing | Loans, lines of credit, owner deposits and draws, loan payments | Credit covers growth and timing gaps, not everyday shortfalls |
Map your cash cycle
Your cash cycle is the number of days between paying out for a job or product and getting paid for it. The longer it is, the more cash you need on hand just to operate.
Trace one typical sale
Count the days for a normal order or job. Rough numbers are fine.
Every day you remove from the cycle frees up cash. Invoicing on the day of delivery and asking for deposits are usually the easiest days to remove.
Your cash is tied up longest in raw materials and work in progress. Buy materials closer to when you need them, ask for deposits on custom or large orders, and watch for slow-moving finished goods.
You usually pay suppliers before your retail customers pay you, often on net 30 to net 60 terms. Track inventory turns by product line, negotiate supplier terms that match your customers' terms, and check credit before extending terms to a new account.
Cash is tied up in inventory on the shelf. Your busiest season needs inventory bought months earlier, so plan seasonal buys in your forecast and clear slow sellers before they become dead stock.
Your biggest cost is labor, often your own time, and it is spent before you invoice. Bill at milestones on longer projects, take deposits, and invoice the day the work is done.
Marketplaces hold your payouts on a schedule and can hold funds longer for new sellers, returns, or disputes. Put each platform's payout schedule into your forecast as its own inflow line.
Payment can take 30 to 90 days, and paperwork errors restart the clock. Register correctly as a vendor, match every invoice exactly to the purchase order, and keep a larger reserve.
Know how fast you get paid
Days sales outstanding (DSO) is the average number of days it takes customers to pay you. Check it monthly. A rising DSO is one of the earliest warning signs of cash trouble.
Calculate your DSO
If your DSO is more than about 10 days longer than the terms you give customers, collections need attention. The accounts receivable calculator shows what that delay costs you.
Build a 13-week cash forecast
Thirteen weeks is one quarter: short enough to estimate well, long enough to see problems coming. Fill in what you expect each week. Use the dates customers really pay, not the due dates on your invoices.
- Enter the cash in your business accounts today.
- List money you expect to come in each week. Count new sales that are not yet confirmed at about 70% of what you hope for.
- List everything going out each week, including the irregular bills: quarterly taxes, insurance, annual renewals.
- Look for any week where ending cash drops below one month of expenses. That is your early warning.
- Update it every week. Fifteen minutes on the same day each week is enough.
Your 13-week cash forecast
Totals and running balances fill in as you type. Your entries are saved in this browser.
| Category | Wk 1 | Wk 2 | Wk 3 | Wk 4 | Wk 5 | Wk 6 | Wk 7 | Wk 8 | Wk 9 | Wk 10 | Wk 11 | Wk 12 | Wk 13 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Starting cash | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Money coming in | |||||||||||||
| Customer payments on invoices | |||||||||||||
| Cash and card sales | |||||||||||||
| Deposits and prepayments | |||||||||||||
| Marketplace or platform payouts | |||||||||||||
| Other money in (loans, owner deposits) | |||||||||||||
| Total in | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Money going out | |||||||||||||
| Rent or mortgage | |||||||||||||
| Payroll and payroll taxes | |||||||||||||
| Contractors | |||||||||||||
| Inventory, materials, supplies | |||||||||||||
| Loan and credit card payments | |||||||||||||
| Insurance | |||||||||||||
| Utilities, phone, software | |||||||||||||
| Marketing | |||||||||||||
| Taxes (quarterly, sales tax) | |||||||||||||
| Owner pay | |||||||||||||
| Other | |||||||||||||
| Total out | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Net cash for the week | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Ending cash | — | — | — | — | — | — | — | — | — | — | — | — | — |
Build a cash reserve
A reserve turns surprises into inconveniences. Start by knowing your monthly operating cost, then set a target.
Your reserve target
Reserve habits that work
If most of your sales happen in a few months, size the reserve to cover the slow months in full, and build it during the busy season.
Get paid faster
Large retailers often pay on net 60 or longer and may take deductions (chargebacks) for late shipments, labeling, or damaged goods. Read the vendor guide closely, track every deduction, and dispute the wrong ones in writing. Some sellers use invoice financing (factoring) to bridge the gap; compare its true cost before signing.
Run a quick credit check on new business clients, get a signed agreement with payment terms, and keep each client's accounts payable contact on file. Small early-payment discounts can work, but check the math with the early-payment discount calculator.
Manage what goes out
Warning signs and what to do
Early signs (fix these this month)
Serious signs (get help now)
If you checked any serious signs, talk to someone this week: your banker, an accountant, a free SBDC or SCORE advisor, or a Linkun coach. Asking early gives you more options.
Build your own cash flow assistant with AI
Any AI assistant (ChatGPT, Claude, Gemini, Copilot) can turn this toolkit into a forecast built around your business. Fill in your business profile at the top of this page and the prompts below update with your details.
Use AI safely: never paste bank logins, full account numbers, or customer personal information. Round your numbers. Check the math, because AI can make arithmetic mistakes. Confirm big decisions with a person.
You are a cash flow advisor for small businesses. Help me build a 13-week cash flow forecast.
About my business: {industry} in {location}. Business model: {model}. I sell through: {channel}. My customers are: {buyer}. Team size: {size}. In business: {stage}.
Ask me one or two questions at a time about: cash in the bank today; how and when customers pay me; expected money in each week (recurring, deposits, new sales); every bill going out and its due date; and any large or once-a-year items in the next 3 months.
Then build a week-by-week table for 13 weeks with rows for each inflow and outflow, total in, total out, net cash, and ending balance. Count unconfirmed new sales at 70%. Flag any week where the ending balance falls below one month of expenses or goes negative. Explain my tightest weeks in plain language and give me three specific actions to close the gaps. Format the table so I can paste it into a spreadsheet.You are a cash flow advisor for small businesses. Give me a direct, plain-language cash flow health check.
My business: {industry} in {location}. Model: {model}. Channels: {channel}. Customers: {buyer}. Team: {size}. In business: {stage}. My goals: {goals}.
Ask me for my monthly sales, monthly expenses, cash on hand, how long customers take to pay, how long I take to pay suppliers, and whether I use credit to cover regular costs.
Then calculate my months of cash runway, reserve in months, days sales outstanding, and cash conversion cycle. Tell me which numbers are healthy and which are warning signs for a business like mine, name my single biggest cash risk, and give me a 30-day action plan with the 3 to 5 most important steps first.Write a set of four short, friendly, professional payment reminder emails for my {industry} business in {location}. My customers are {buyer}.
1) 3 days before the due date, 2) 1 day after, 3) 7 days after, 4) 14 days after (firm, with next steps).
Each email should include the invoice number, amount, due date, and how to pay as placeholders. Keep each under 100 words and keep the relationship warm.My {industry} business in {location} has a busy season and a slow season. Help me plan cash for a full year.
Ask me which months are busy and slow, my average monthly sales in each, and my fixed monthly costs.
Then show a month-by-month cash plan, how much to set aside each busy month to cover the slow months, and five ideas to bring in revenue during the slow season that fit a {model} business selling through {channel}.Your 30-day action plan
Week 1: Know where you stand
Week 2: Build the forecast
Week 3: Speed up cash
Week 4: Make it a habit
Frequently asked questions
What is the difference between cash flow and profit?
Profit is income minus expenses for a period, recorded when sales are earned. Cash flow is the actual money moving in and out of your bank account, recorded when it moves. A profitable business can run out of cash if customers pay slowly or if it spends ahead of sales.
How much cash reserve should a small business keep?
A common target is at least two months of operating expenses, with three to six months for seasonal businesses, businesses with a few large customers, or businesses that sell to government or big retailers. Build it gradually by saving a fixed percentage of every deposit.
Why use a 13-week cash flow forecast?
Thirteen weeks is one quarter. It is short enough to estimate accurately week by week and long enough to see a shortfall coming with time to act, such as collecting invoices, delaying purchases, or arranging credit.
What is a good days sales outstanding (DSO)?
It depends on the payment terms you offer. A useful rule: your DSO should be within about 10 days of your terms. If you offer net 30 and your DSO is 45 or more, customers are paying late and collections need attention.
Can I use ChatGPT or another AI tool to make a cash flow forecast?
Yes. Use the prompts in this toolkit to have an AI assistant ask you questions and build a forecast table. Do not share bank logins, account numbers, or customer personal data, and double-check the math.
Anything you type into this page is saved only in your browser so you can come back to it. This toolkit is educational. It is not legal, tax, or accounting advice; check decisions with a professional or a free advisor at your local Small Business Development Center.