Knowledge Center » Blog » ForwardAI Predict » Cash Flow Forecasting – Helping Entrepreneurs Keeping Their Businesses Afloat During the COVID-19 Pandemic


Cash flow management and forecasting is a vital part of running a business. It is critical for any organization, large or small, during normal times and unprecedented ones.

As small business owners struggle to navigate the complexities of the current economy amid coronavirus outbreak, it’s now more important than ever to have a deep understanding of how to keep cash flow healthy and business moving whilst the economy takes time to recover.

If you’re one of the entrepreneurs who are struggling for profitability – those with low cash reserves or unstable cash flows, then we recommend you preparing financial forecasts as soon as possible.

Creating Your Cash Flow Forecasts

In the wake of the novel coronavirus outbreak, millions of businesses around the world have seen an impact on their operations.

How losing clients, office closure or delayed payments due to lockdown have impacted your business? Cash flow forecasting is a potent feature that helps you define business’ critical uncertainties. It can help you visualize how the impact of offering a discount, laying off few employees or moving your business online, etc can impact the future of your cash flow that in turn will help you make better decisions to prevent liquidity shortfalls.

In ordinary conditions, you would review past year’s performances to create the financial forecasts, but in the present condition, greater adaptability and assumptions are required.

Regularly Check Your Cash Flow Forecast During COVID-19

As several factors can affect the cash flow in the present situation, you should always update the projections whenever a transaction occurs. Say, you issued an invoice, or you are expecting a delay in payment or planning to invest in the near future, you should update your projections to reflect them.

Generally, it’s recommended to review your business cash flow a minimum of once a week. The weekly cash flow forecast powers your company to comprehend the details of the business at a more granular level and help improve the accuracy of the forecast in this unprecedented time.

Tips for Managing Your Business Cash Flow during These Challenging Times

  • To begin with, you need to analyze how COVID-19 outbreak has affected your small business and how these uncertainties will affect your cash inflows and outflows in the future.
  • For better forecasting, it’s incredibly important for your business to keep your bank accounts reconciled. We recommend you do this once a week which helps you forecast and plan your financial position effectively.
  • It’s a great idea to start with 3 months rolling cash flow which is updated on a weekly basis. This will give you a general idea of your cash inflows and outflows for next few months to allow for plans that intend to change as needed.
  • Answering questions like, ‘what if my business sales go down?’ ‘What if I renegotiate my rent, how it will affect my cash flow? And ‘What if I defer my payments on my loan, what will it cost me in the long run?’’ It can help you better forecast the cash flow and you be in the know for how long the business can meet it’s ongoing cost and whether you need to borrow.
  • Start modeling the best and worst-case scenarios of business changes due to coronavirus pandemic and its aftermath. Analyze and compare different scenarios as it will help you create quick action plans to baffle the cash flow risk and make informed decisions.
  • Forecast to see if extra money can help your business’ cash flow and if it works, secure funds for your business.
  • Do an in-depth analysis of several important key indictors to quickly analyze your cash flow during COVID-19 such as commercial receivables, inventory management, commercial debts, purchases, fixed costs, and investments.

Use a Cash Flow Forecasting Tool to Weather the COVID-19 Storm

Use a cash flow forecasting and management software such as ForwardAI Predict, to get an accurate picture of your past, present and future cash flow. This futuristic app helps you seamlessly create a scenario, estimate the money you expect to flow in and out, and see what your future cash position would look like, so you can make better financial decisions and plan for potential problems before they cause a cash crisis.

Signing up for ForwardAI Predict is easy! Simply create your free account, connect your business, and run your cash flow forecasts.