cash plan

Also called: cash budget, cash forecast

A month-by-month forecast of cash in, cash out and the closing balance, with the real timing of payments. It shows a cash gap before it happens.

A cash plan (cash budget, cash flow forecast) is a month-by-month forecast of cash in, cash out and the closing balance, with every payment on its real date. Prepayments count when customers pay, provider payouts when they're paid, bills the month after, invoices when clients actually settle them. It answers one question the P&L can't: will there be enough money in the bank at the end of every month?

The annual total is the least useful number in it. A business can add millions over a year and still dip dangerously in one season, because prepayments are spent on later service, peaks are paid for in the month after, and some customers pay four times a year. So each month is measured against a buffer, the minimum balance the company wants to keep for salaries and surprises, not against zero.

A good cash plan is a working tool, not a yearly ritual. It is updated as actual months come in, it shows the lowest month well in advance, and it lets you test decisions before making them: a big purchase, a new contract on payment terms, a credit line. The earlier a gap shows up in the plan, the cheaper it is to close.

Example

Klasna's cash plan for 2027 starts with 250,000 UAH and a buffer of 1,000,000 at every month end. Selected months:

Month	Net cash flow	Closing cash
January	+974,590	1,224,590
April	+1,359,940	4,640,535
June	−2,723,885	1,347,340
July	−431,410	915,930
August	−323,797.50	592,132.50
November	+607,890	5,156,077.50
December	−450,810	4,705,267.50

The year adds 4,455,267.50 (250,000 + 4,455,267.50 = 4,705,267.50), yet July and August end below the buffer, and August is 1,000,000 − 592,132.50 = 407,867.50 short. June shows why: families buy few packages, and Klasna still pays the second half of May's busy month.

Common mistakes

Trusting the annual total. Check every month; the lowest one decides.
Measuring against zero. Zero is where salaries stop; use a buffer.
Using P&L timing. A cash plan needs payment dates, not the dates revenue and costs are recognized.
Building it once a year. Update it with actuals and test big decisions in it before you sign.

Learn it in the course

A twelve-month cash flow forecast · A cash flow forecast example, month by month with real payment timing: prepayments, payouts twice a month, quarterly invoices and the summer valley a yearly total hides.
Case: can Klasna grow Teams without a loan? · Three profitable corporate deals and a summer cash low: test invoice payment terms, invoicing, prepayment and pace against the buffer, and decide whether working capital financing needs a loan.