Friday evening, 11.47pm. You take another look at the balance on the business account. On Monday, salaries have to be paid. On Wednesday, the’URSSAF. And that big client who was due to pay yesterday has not shown any sign of life. With this feeling in their stomachs, thousands of SMES are familiar with it. It has a name: piloting on sight.
A cash flow forecast is the tool that transforms this anxiety into lucidity. It's not just another dashboard. It's the only document that answers, week after week, the question that obsesses every manager: will you have the money to meet your commitments in 30, 60, 90 days?
Why your SME is at risk without this tool
The figures speak for themselves. According to Altares' annual studies of business failures, tens of thousands of insolvency proceedings are declared each year in France. The Banque de France and various economic observatories agree on the same diagnosis: a large proportion of these bankruptcies are not due to a lack of profitability, but to a lack of cash flow.
A company can be profitable on paper and then file for bankruptcy the following month. Why should this be? Because accounting profit is not cash. You invoice in March and collect in June, but your employees and suppliers are paid in between.
L’Observatory of payment periods Every year, the Banque de France reminds us that the average delay in payment in France exceeds ten days. For an SME invoicing €500,000 a year, each day's delay costs you hundreds of euros that you can't use.
What a cash flow forecast is in practice
Forget the income statement. Forget the balance sheet. A cash flow forecast follows a brutal and simple logic: what comes into the account, what goes out, and what balance is left at the end of each period?
The Excel table is structured in three blocks.
The first block lists your expected receipts, month by month over at least twelve months: customer payments (taking into account their actual payment terms, not those written on the invoice), grants, current account contributions, loan releases.
The second block details your cash outflows: salaries, social security contributions, rent, suppliers, VAT to be repaid, corporation tax, loan repayments, planned investments.
The third block performs the subtraction. The balance at the start of the month, plus receipts, minus disbursements, equals the balance at the end of the month, which becomes the balance at the start of the following month. This rolling balance is your compass.
Cash flow forecast: the Excel structure that really works
In Excel, your columns represent the months (M1 to M12), and your rows the items. Work in terms of VAT, not excluding VAT. You're interested in the money that actually flows into your account, not in sales performance.
Include a line for input VAT and a line for deductible VAT, with the actual transfer to CA3 the following month. This is the classic mistake that takes a manager from a positive balance to an unexpected overdraft.
Add two columns per month: «Planned» and «Actual». At the end of each month, you compare. This variance is your best teacher. It tells you where your assumptions are wrong, and corrects them for the following months. Bpifrance Création also provides downloadable templates that follow this logic, so you don't have to start from scratch.
Headings that managers forget (and that hurt)
Certain items are systematically underestimated or ignored.
VAT, already mentioned, tops the list. It is not a product, it does not belong to you. However, it sits on your account between invoicing and payment, giving you the illusion of wealth.
Corporation tax, paid in four instalments for companies under the traditional system. The balance is due in May, and every year it comes as a surprise to managers who had made no provision for it.
Holiday pay, end-of-year bonuses, social security contributions. Everything that only happens once a year weighs heavily if you haven't anticipated it. Upcoming investments, equipment renewals, leasing instalments. Enter them in the table as soon as you present them, even if you have to adjust them afterwards.
Mistakes that ruin your cash flow forecast
Commercial optimism is enemy number one. You record collections on the theoretical due date, whereas your customers pay on average two weeks late. Systematically offset your receipts against the actual period over the last twelve months.
The second pitfall: not updating the table. A live cash flow forecast is updated every week. Thirty minutes on Monday morning is enough. A file consulted every quarter becomes a comforting document, not a management tool.
Third mistake: confusing profitability with liquidity. You can sell with a 30 % margin and still default on your payments because your customers pay in 90 days when your suppliers demand 30 days. This is what working capital requirement, A must for your reading.
The discipline that transforms a file into a nervous system
An effective cash flow forecast is not a one-off project. It's a ritual.
On Monday morning, you update the receipts and disbursements for the previous week. Compare them with the forecast. Identify any discrepancies. You project the next twelve weeks in detail, and the next twelve months in macro terms.
This discipline changes your attitude as a manager. You no longer suffer the unexpected, you anticipate it. You negotiate with suppliers from a position of strength, because you know exactly when you'll be able to pay. You talk to your banker before you get into difficulty, which radically changes the quality of the conversation.
The cash flow forecast, your best sleep
A manager's peace of mind does not come from sales figures. It comes from visibility. Knowing, to within 48 hours, what's going to happen to your account in three months' time means getting back the nights you've robbed yourself of by managing on sight.
Build your cash flow forecast this weekend. Four hours is enough for the first version. Improve it every week for three months. You'll never go back.
Your SME deserves better than Friday night fears. It deserves a painting. And you deserve to sleep.
