The cash forecast is monthly. The shortfall happens on a Tuesday.

A business can end every month in surplus and still run out of money halfway through one: the monthly view is built to hide exactly that.

By Steve 5 min read
Abstract bridge artwork for The cash forecast is monthly. The shortfall happens on a Tuesday.

A monthly cash forecast is an average of a shape. It tells you where the balance lands on the last day of the month, having netted off everything that happened in between. That is useful for a bank covenant and almost useless for the question that actually keeps owners awake: is there enough money in the account on the day the largest payment leaves? Plenty of businesses net positive every month for a year and still spend two or three of those months a phone call away from a problem.…

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