Business Cash Flow Calculator

Profit and cash flow are not the same thing—and confusing them is the most common reason profitable small businesses fail. Profit is an accounting concept: revenue minus expenses over a period. Cash flow is the actual movement of money in and out of your bank account. A profitable business can run out of cash if customers pay slowly, inventory ties up working capital, or a large loan payment comes due before receivables arrive. A cash flow projection tells you, in advance, when those gaps will occur.

The cash flow formula

Ending Cash = Beginning Cash + Total Inflows − Total Outflows

Each month, you start with the previous month's ending cash, add every dollar that comes in (sales receipts, loan draws, owner contributions, tax refunds), subtract every dollar that goes out (payroll, rent, inventory, loan payments, taxes, owner distributions), and arrive at a new ending balance. Roll this forward month by month and you have a 12-month projection. The math is simple—but the discipline of doing it consistently is what separates healthy businesses from reactive ones.

Why timing matters more than totals

A $100,000 sale booked in March doesn't help you make April's payroll if the customer pays on net-60 terms in May. Cash flow projections force you to think about when money moves, not just how much. Most small businesses project in 13-week or 12-month windows; the shorter window is more accurate but less strategic. The 12-month projection in this calculator is ideal for spotting seasonal shortfalls, planning equipment purchases, and sizing a line of credit.

Reading your projection

Three numbers in your projection matter most. Ending cash tells you whether you're building or depleting reserves over the year. Lowest balance tells you the size of the gap you'll need to bridge—this is the minimum line of credit or owner contribution required to avoid overdrafts. Net cash flow tells you whether the business model itself is sustainable: positive net cash flow means operations generate cash; negative means you're burning reserves (or taking on debt) just to stay afloat.

How much reserve is enough?

Most advisors recommend 3–6 months of operating expenses in cash reserves. Seasonal businesses, those with lumpy receivables, or companies planning expansion should hold 6–12 months. Keep reserves in a high-yield business savings account for liquidity and modest interest. If your projection shows the lowest balance dipping below one month of operating expenses, you're under-reserved—arrange a line of credit before you need it, not after.

Three ways to improve cash flow

First, accelerate receivables: invoice immediately, offer 2/10 net 30 early-payment discounts, require deposits on large orders, and tighten credit terms. Second, delay payables without damaging relationships: negotiate net-60 with key suppliers, lease equipment instead of buying, and stagger large expenses across the year. Third, right-size inventory: dead stock ties up cash; use just-in-time ordering for fast-moving items and clear slow movers with discounts. None of these require new revenue—they simply align the timing of cash in and cash out.