Budgeting & Cash-Flow Forecasting · United StatesA budget for the year, and a cash-flow forecast that shows which weeks will be tight before you reach them.
We build an annual operating budget and a rolling cash-flow forecast from your reconciled books, compare plan with actual results each month, and go through the differences with you.
- Built on
- Reconciled books and assumptions you approve
- Forecast views
- Typically 13 weeks by week and 12 months by month
- Each month
- Budget-versus-actual report and a financial review with you
- Cash planned for
- Estimated tax, sales tax, payroll deposits, loan repayments, state fees
Overview
What it is, and why it matters.
Budgeting and forecasting are the forward-looking side of accounting. A budget sets out the revenue, costs and profit you plan for the year, month by month. A cash-flow forecast starts from the money in your accounts today and projects the receipts and payments ahead, so you can see the balance you are likely to hold on a given date.
The two answer different questions, because profit and cash run on different timetables. A profitable month can still end with less in the bank if customers pay late, inventory is bought ahead of sales or a loan repayment falls due. We typically keep two views of cash: a 13-week forecast by week for near-term decisions, and a 12-month forecast by month for planning.
For a US business, many of the largest payments are known in advance and are not monthly. Owners of pass-through businesses generally pay federal estimated tax using Form 1040-ES in April, June, September and January, while a calendar-year C corporation filing Form 1120 generally pays its installments in April, June, September and December. States with an income tax generally expect their own estimated payments, and their dates do not always match the federal ones.
Sales tax is remitted on the filing frequency each state assigns, payroll taxes reported on Form 941 are generally deposited monthly or semiweekly, and annual reports and franchise taxes fall due on state dates. We place each of these in the forecast on the date it leaves the account. Each month we compare actual results with the budget, explain the larger differences, and use the same figures for simple financial analysis such as margins, working capital, cash runway and break-even revenue.
Who needs it
Who typically needs it.
- 01
Seasonal businesses
Retailers, landscapers, hospitality operators and others whose sales peak for a few months while rent, payroll and loan repayments continue all year.
- 02
Owners paying estimated tax
Sole proprietors, partners and S corporation shareholders whose tax on business profit is not withheld, and who need cash on hand for each installment.
- 03
Businesses with a loan or line of credit
Companies with fixed repayments or loan covenants, or whose lender asks for a budget or cash-flow projections alongside the financial statements.
- 04
Companies about to add fixed costs
Businesses planning to hire, sign a lease or buy equipment that want to see the effect on cash and break-even revenue before they commit.
- 05
Ecommerce and inventory businesses
Sellers who pay suppliers weeks or months before the sale, receive payouts net of fees and reserves, and hold sales tax collected for several states.
- 06
US companies owned from abroad
US subsidiaries and foreign-owned LLCs whose owner or parent company expects a budget and a monthly variance report on its own reporting calendar.
When you need it
The moments that usually trigger it.
- Your profit and loss shows a good year, but the bank balance keeps falling.
- An estimated tax installment or a sales tax payment came due and the cash had not been set aside.
- You’re about to hire, sign a lease or take on a loan and want to see what it does to cash over the next 12 months.
- Your lender has asked for a budget or cash-flow projections with your financial statements.
- Your sales are seasonal and you need to know how much cash to carry into the slow months.
- You set a budget in January and haven’t compared it with actual results since.
- An investor or a parent company abroad wants a monthly budget-versus-actual report.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
An annual operating budget by month, built from your prior-year results and the assumptions you give us for sales, pricing, headcount and spending.
- 02
A monthly budget-versus-actual report, with the larger variances explained rather than only listed.
- 03
A 13-week cash-flow forecast by week, showing expected receipts, payments and the closing bank balance.
- 04
A 12-month cash-flow forecast by month, rolled forward as each month closes.
- 05
A calendar of known outflows placed in the forecast on their due dates: federal and state estimated tax, sales tax remittances, payroll and payroll tax deposits, loan repayments, and annual state reports and franchise taxes.
- 06
A monthly financial review with you, covering results, variances and the updated forecast.
- 07
Financial analysis from the same figures: gross and net margin, working capital, receivable and payable days, cash runway and break-even revenue.
- 08
Scenario versions of the forecast where agreed, such as a new hire, a price change or slower customer payments.
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 conversationScoping call and review of the books
We look at your entity type, tax classification, accounting file and the last one to two years of results, and check that the books are reconciled. If they aren’t, we scope catch-up bookkeeping first.
Agree the assumptions
You tell us what you expect for sales, pricing, hiring, major purchases and financing. We write the assumptions down, because the budget and the forecast can only be as sound as they are.
Build the budget and the cash-flow forecast
We draft the annual budget by month and the 13-week and 12-month forecasts, with tax, payroll, loan and state payments placed on their due dates. You review the drafts and approve the budget.
Monthly budget-versus-actual report
Once the month is closed, we compare actual results with the budget, explain the larger variances, and update the forecast from the reconciled bank balance.
Monthly financial review
We go through the report and the forecast with you, and note the weeks when cash is expected to be tight and the decisions that follow from them.
Reforecast and next year’s budget
The 12-month forecast rolls forward each month, and we reforecast when an assumption changes materially. Before year-end, the next budget starts from the current year’s actual results.
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.
Monthly accounting and bookkeeping plans
Three monthly plans, sized by how many transactions your business has and how much reporting you want from the figures.
Complete Finance
$499 per month
For established small businesses.
- Up to 300 transactions monthly
- Monthly reconciliations and financial statements
- Budget-versus-actual reporting
- Monthly financial review
- Basic cash-flow tracking
No complex controller work, audit, assurance or CFO-level advisory included.
Each plan covers one entity with a defined number of transactions. Catch-up work, tax returns, payroll and sales tax returns are priced separately unless a plan lists them.
Finance and reporting
| Service | Fee |
|---|---|
| Monthly cash-flow forecasting | $100–$200extra per month |
| Budget and financial analysis | $150–$300per month |
| Finance advisory | $100–$175per hour |
Finance work is built on reconciled books. It does not include audit, review or other assurance reports, which an independent licensed CPA firm issues.
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 history
- Access to your accounting file, reconciled to the latest month-end
- Monthly profit and loss and balance sheet for the last one to two years
- Aged receivables and aged payables reports
- Last filed federal and state returns
Known commitments
- Loan agreements and repayment schedules, including any covenants
- Leases and other fixed contracts
- Pay dates and payroll provider reports, if you run payroll
- Estimated tax amounts from your tax preparer, and your sales tax filing frequency by state
- Annual report, franchise tax and license renewal dates for each state
Plans and assumptions
- Sales expectations by product, service or customer, including seasonality
- Planned hires, pay changes and major purchases
- Customer payment terms and supplier terms
- Any budget format or reporting calendar set by a lender, investor or parent company
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
Loan principal, inventory purchases and owner draws reduce the bank balance but do not appear on the profit and loss as expenses, or not in the same month. A budget built only from the profit and loss can show a surplus in a month when the account runs short.
- Mistake 02
Leaving the owners’ tax out of the forecast
In a pass-through business, the owners’ estimated tax is usually paid from draws or distributions, so it never appears as a business expense. Left out of the forecast, each installment arrives as an unplanned withdrawal, and paying late or too little can bring an IRS underpayment penalty.
- Mistake 03
Counting sales tax collected as money to spend
Sales tax you collect is held for the state until the return is due. If the forecast treats it as available cash, the remittance shows up as a shortfall.
- Mistake 04
Setting a budget and never comparing it
A budget that isn’t measured against actual results each month stops informing decisions within a few months. The useful part is the comparison: why revenue or a cost line differed from plan, and whether the difference will continue.
- Mistake 05
Forecasting from unreconciled books
If the opening bank balance, receivables or payables in the books are wrong, every week of the forecast carries the error forward. A forecast should start from a balance that agrees with the bank statement.
Worth knowing
The limits, stated upfront.
This is a defined budgeting, forecasting and reporting service, not CFO-level or controller work. We do not manage your finance function, and we do not issue audit, review or compilation reports, or any other form of assurance, on historical or forecast figures.
Budgets and forecasts are estimates built on assumptions you provide and approve. Actual results will differ, and nothing in them is a guarantee of future revenue, profit or cash.
We do not give investment, lending or securities advice. Whether to borrow, raise money or invest is your decision, and a lender’s or investor’s decision is theirs.
The work depends on reconciled books. If your books are behind, catch-up bookkeeping and bank reconciliation are scoped separately and come first.
Tax return preparation and payroll processing are separate services. The forecast plans cash for tax and payroll payments using the amounts your tax preparer and payroll provider calculate; it does not calculate or file them.
Due dates and deposit schedules vary by entity type, state and filing frequency, and can change. We confirm your own calendar when we scope your work.
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 a plan for revenue, costs and profit over the year, while a cash-flow forecast projects the money that will actually enter and leave your bank accounts, and when. The budget is usually set once and measured against; the forecast is updated as results come in. You need both, because a profitable business can still run short of cash.
What is a 13-week cash-flow forecast?
It is a week-by-week projection of cash receipts, cash payments and the closing bank balance for the next quarter. Thirteen weeks is long enough to cover a quarter of pay runs, tax deposits and supplier payments, and short enough that most of the items are already known. It is usually rolled forward so there are always 13 weeks in view.
How often is the cash-flow forecast updated?
The 12-month forecast is updated monthly, once the books for the month are closed and reconciled. The 13-week view can be refreshed more often, such as weekly or every two weeks, when cash is tight or a large payment is approaching. We agree the frequency when we scope your work.
Do my books need to be up to date before you can build a budget or forecast?
Yes. The forecast starts from the bank, receivable and payable balances in your books, so they need to be reconciled to a recent month-end. If they aren’t, we scope catch-up bookkeeping or bank reconciliation first, as separate work.
Will a bank or investor accept a budget or forecast you prepare?
That is their decision, and requirements vary. Lenders commonly ask a small business for a budget or cash-flow projections alongside historical financial statements, and we prepare them in the format requested with the assumptions stated. We do not issue an assurance report on a forecast; if one is required, an independent licensed CPA firm must provide it.
How is this different from a fractional CFO or controller service?
It is narrower. We prepare the budget, the cash-flow forecast, the monthly budget-versus-actual report and the financial analysis described here, and review them with you each month. We do not act as your CFO or controller: we don’t run your finance function, negotiate with lenders or investors for you, or make financing decisions.
Our US company reports to an owner or parent company abroad. Can the budget follow their calendar?
Yes. We can set the budget periods and the monthly report to the parent’s financial year and reporting deadlines, and map the lines to its chart of accounts. US tax payments still go into the forecast on their US due dates, which follow the company’s US tax year.
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
