Budgeting & Cash-Flow Forecasting · PakistanA budget for the year, and a cash-flow forecast that shows tax, payroll and loan payments weeks before they fall due.
We build your annual budget and a rolling cash-flow forecast in rupees from reconciled books, report budget-versus-actual every month, and go through the figures with you so you can see a shortfall coming while there is still time to act.
At a glance
- Our fee
- From PKR 20,000
- Authorities
- Federal Board of Revenue (FBR) · Provincial revenue authorities (PRA, SRB, KPRA, BRA)
- Forms & references
- Advance tax (section 147)Monthly sales tax returnCPR / PSID
- Budget year
- Usually 1 July to 30 June, matching the normal tax year
- Forecast views
- Commonly a rolling 13-week view and a 12-month view
- Monthly report
- Budget-versus-actual, with variances explained and simple financial analysis
- Built on
- Reconciled books in Pakistani rupees (PKR)
Overview
What it is, and why it matters.
Your books and financial statements show what has already happened. A budget and a cash-flow forecast look ahead: the budget sets out the income, costs and profit you expect for the year, and the forecast shows when cash will actually arrive and leave.
In Pakistan the gap between profit and cash is often a tax gap. Customers and banks deduct tax from many of your receipts, sales tax is generally due on what you supplied in the month whether or not the customer has paid, tax you deduct from staff and suppliers has to be deposited, and companies and AOPs pay advance tax each quarter. A profitable month can still end short of cash.
We prepare an annual budget, usually for the 1 July to 30 June tax year, and compare it with your actual results every month in a budget-versus-actual report. Alongside it we keep a rolling cash-flow forecast, commonly a 13-week view for the near term and a 12-month view for planning, with tax, payroll, running finance and loan repayments placed on the dates they fall due. Each month you also receive simple financial analysis: margins, working capital, cash runway and break-even.
Everything is built on your reconciled books in rupees and on assumptions you agree with us, which we write down. For exporters and freelancers, foreign-currency receipts are forecast in their own currency and converted at a stated exchange rate, so you can see what a different rate would do. A forecast is an estimate, not a promise; its use is in showing a shortfall early enough to act on.
Who needs it
Who typically needs it.
- 01
Private limited companies
SMEs whose directors want a budget agreed at the start of the year and monthly figures to measure against it.
- 02
AOPs and family partnerships
Partners who need to agree stock purchases, drawings and tax payments in advance instead of settling them from whatever is in the bank.
- 03
Growing sole proprietorships
Owners who have so far planned from the bank balance and are now hiring, taking on premises or thinking about incorporating.
- 04
IT exporters and freelancers
Software houses, agencies and freelancers paid in dollars or pounds, whose rupee income moves with the exchange rate while salaries and rent do not.
- 05
Businesses with bank borrowing
Traders, manufacturers and distributors using running finance or term loans, who need to see markup, repayments and the room left on each facility.
- 06
Pakistani subsidiaries of foreign groups
Local companies that send an annual budget and a monthly variance report to a US, UK or other parent.
When you need it
The moments that usually trigger it.
- Your accounts show a profit but the bank balance keeps falling, and you can’t see why.
- The new tax year starts on 1 July and you have no budget to measure it against.
- Sales tax, an advance tax instalment and payroll have fallen due within days of each other and caught you short.
- Your bank has asked for projected cash flows before renewing or increasing a running finance facility.
- You’re deciding whether the business can afford to hire, lease premises or buy equipment.
- Your clients pay in dollars, and a move in the exchange rate changes your rupee income from one month to the next.
- Customers are taking longer to pay and you are covering the gap from running finance or your own pocket.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
An annual budget set out month by month, usually for the 1 July to 30 June year: revenue, direct costs, overheads, payroll, capital spending and an estimate of income tax, including minimum tax on turnover where it applies.
- 02
A monthly budget-versus-actual report drawn from your reconciled books, with each significant variance explained in plain words.
- 03
A rolling 13-week cash-flow forecast of expected receipts and payments, week by week, starting from the reconciled bank balance and showing receipts net of tax deducted at source.
- 04
A 12-month cash-flow forecast tied to the budget, showing the lowest expected balance and the month it falls in.
- 05
Known outflows placed on their due dates: quarterly advance tax, monthly federal and provincial sales tax, withholding tax deposits, payroll, markup on running finance, and loan and lease repayments.
- 06
For exporters and freelancers, foreign-currency receipts and costs forecast in their own currency and converted at a stated exchange rate, with the effect of a weaker or stronger rupee shown.
- 07
Simple financial analysis each month: gross and net margins, debtor, creditor and stock days, cash runway and break-even sales.
- 08
A monthly financial review with the owner or directors, and a short written note of the decisions taken and the assumptions that changed.
The process
How it runs, step by step.
Timings depend on the authority and on how quickly documents come together. We tell you what’s typical for your case at the start.
Start with a conversationCheck the starting point
We review your books, bank reconciliations, tax registrations, borrowing and payroll to confirm the figures are reliable enough to forecast from.
Agree the assumptions
We agree with you the assumptions for sales, prices, credit terms, staffing, planned spending and, for foreign income, the exchange rate, and check the tax assumptions against the current Finance Act. Every assumption is written down.
Build the budget and forecasts
We build the annual budget by month and the 13-week and 12-month cash-flow forecasts, with tax, payroll and loan payments on the dates they fall due.
Review and approve
You see the drafts, question the assumptions and approve the budget before it becomes the yardstick for the year.
Monthly budget-versus-actual report
Once each month’s books are reconciled, we compare actual results with the budget, explain the variances, update the analysis and roll the cash-flow forecast forward.
Monthly financial review
We go through the report with you, look closely at the weeks where cash is tight, and revise the assumptions if the business has changed.
Fees
What it costs.
Our professional fee for this work. Government and third-party charges are separate, and you have your total in writing before we start.
Finance and reporting
| Service | Fee |
|---|---|
| Budget and cash-flow forecast | PKR 20,000–30,000 |
Where an audit is required, the audit report comes from a practising chartered accountant firm, whose fee is separate.
What we’ll need
The information to have ready.
A typical checklist. After the first conversation we send a version specific to your situation, so you don’t gather anything you don’t need.
Books and bank records
- Access to your accounting software or ERP, or the latest trial balance and ledgers
- Bank statements and reconciliations for every business account, including foreign currency accounts
- Aged lists of amounts owed by customers and to suppliers
- Last annual accounts or management reports
Tax and payroll
- NTN, and STRN or provincial registration if registered for sales tax
- Recent sales tax returns and the last income tax return
- Advance tax paid during the year, and CPRs for tax deposited
- Payroll sheets, with planned hires and salary changes
Borrowing and commitments
- Running finance and loan facility letters, with limits, markup terms and repayment schedules
- Lease and rent agreements
- Planned purchases of equipment or vehicles
Sales and plans
- Sales by customer or product for the last 12 months
- Customer contracts and credit terms, including foreign clients and the currency they pay in
- Orders in hand, expected new work and any price changes you plan
Please don’t email passports or bank statements. Once we’ve spoken, you’ll get access to a secure upload.
Common mistakes
Where this usually goes wrong.
The problems we are most often asked to fix, and what they tend to cost.
- Mistake 01
Treating profit as cash
Profit counts a sale when it is invoiced; the bank counts it when the customer pays. A growing business can show a profit and still run short, because stock and unpaid invoices absorb the cash first.
- Mistake 02
Leaving tax out of the forecast
Advance tax, sales tax and withholding tax deposits are large, dated payments. A forecast that shows only suppliers and salaries looks healthy until the week one of them falls due, and paying late can bring default surcharge and penalties.
- Mistake 03
Forecasting receipts at the invoice amount
Customers and banks deduct income tax from many payments, and certain buyers withhold sales tax as well. Receipts should be forecast at the amount that will reach your account, with the tax deducted recorded separately, since some of it is adjustable against your return and some is final.
- Mistake 04
Setting a budget in July and not looking at it again
A budget only helps if actual results are compared with it every month. Without a budget-versus-actual report, overspending and falling margins tend to surface at the year end, when it is too late to respond.
- Mistake 05
Using one exchange rate for the whole year
For exporters and freelancers, rupee income depends on the rate the bank applies when each receipt is converted. A forecast built on a single rate hides how much a move in the rupee would change your cash.
Worth knowing
The limits, stated upfront.
This is a defined budgeting, forecasting and reporting service, not a CFO or financial controller role. We don’t manage your finance team, approve payments, deal with lenders on your behalf or run the business’s finances day to day.
We don’t audit your figures or issue an audit or assurance report on them. If a bank or investor needs an independent report on your accounts or projections, it must come from a practising firm of chartered accountants.
This is not investment or lending advice, and we don’t recommend investments or loan products or arrange finance. Forecasts are estimates built on your assumptions and on the tax rules, exchange rates and markup known when they are prepared; they are not guarantees, and actual results will differ.
The work depends on books that are up to date and reconciled. If postings or bank reconciliations are behind, catch-up bookkeeping comes first and is scoped separately.
Preparing income tax returns, sales tax returns and withholding statements, and processing payroll, are separate from this service. We forecast those payments from your records; we don’t compute the final liability or file anything here.
Questions
Budgeting & Cash-Flow Forecasting: frequently asked.
If yours isn’t here, ask us directly. We’ll answer in plain terms.
Ask a questionWhat is the difference between a budget and a cash-flow forecast?
A budget is your plan for the year’s income, costs and profit; a cash-flow forecast shows when money will actually enter and leave the bank. The budget is normally set once and used as the yardstick for the budget-versus-actual report, while the forecast is updated as the year unfolds. You need both, because a business can meet its budget and still run short of cash.
What is a 13-week cash-flow forecast, and how often is it updated?
It is a week-by-week schedule of the cash you expect to receive and pay over the next 13 weeks, starting from your reconciled bank balance. Thirteen weeks is about one quarter, so the view usually takes in three payroll runs, three sales tax payments and the next advance tax instalment. We roll it forward at least monthly with the budget-versus-actual report, and more often when cash is tight; the frequency is agreed when we scope the work.
Do my books need to be up to date before you start?
Yes. A forecast starts from a reconciled bank balance and reliable figures for debtors, creditors and tax balances, so books that are months behind produce a forecast you can’t rely on. If yours need catching up, that is done first and scoped as separate bookkeeping work.
How do you plan for advance tax and sales tax in a cash-flow forecast?
Each goes into the forecast as a dated payment, estimated in advance and replaced with the actual figure once it is computed. Companies and AOPs pay quarterly advance tax under section 147, due on 25 September, 25 December, 25 March and 15 June, while sole proprietors who are liable pay by the 15th of those months. Federal sales tax is typically paid by the 15th of the following month; the provinces are often similar, but each authority sets and extends its own dates. We estimate advance tax from forecast turnover and your latest assessed tax, and sales tax from forecast sales less the input tax you expect to claim.
My clients pay in dollars. How is the exchange rate handled in the forecast?
We forecast those receipts in dollars and convert them at an exchange rate you agree as an assumption, then show what a weaker or stronger rupee would do to your cash. We don’t predict the rate. The tax your bank deducts from export proceeds and any costs you pay in foreign currency, such as software subscriptions, go into the forecast too.
Will a bank accept your cash-flow forecast for a running finance facility?
It can support an application or a renewal, but what a bank accepts is the bank’s decision. Banks often ask for projected cash flows alongside financial statements, and may want their own format or audited accounts. We prepare the forecast with its assumptions stated; it remains your forecast, and we don’t certify it or issue an assurance report on it.
How is this different from a CFO service?
It is narrower and has a defined scope: a budget, a cash-flow forecast, a monthly budget-versus-actual report with simple financial analysis, and a monthly review. A CFO or financial controller takes ongoing responsibility for finance strategy, funding, lender relationships and the finance team. We don’t take on that role under this service.
Related
Often needed alongside this.
Speak with a consultant
Talk to us about budgeting & Cash-Flow Forecasting.
Pick the closest match and we’ll take it from there. You’ll get a written scope and fee before any work begins.
Or use our three-step guide, or email hello@fiscorra.com