The most confusing moment in a small business is the one where the accounts say you made money and the bank says you cannot pay for anything. Both are telling the truth. They are answering different questions.
Profit and cash are not the same event
Profit is recorded when you raise the invoice. Cash arrives when the customer pays it. Between those two moments you have already paid for the goods, the rent and the staff.
So a good month on paper and a terrible week at the bank are not a contradiction at all. They are the normal condition of any business that sells on credit, and the gap is widest precisely when things are going well — because growth means more money going out ahead of more money coming in.
Why the bank balance does not help either
It tells you where you are, not where you are heading. Everyone already knows today's balance. What nobody can see is the week six weeks out where three bills land together and the one customer who was going to cover them has not paid yet.
That week is visible today. It just has to be assembled from things you already have written down.
What a forward view is made of
Three streams, laid out against a calendar rather than added into a total:
- Money coming in — what is still unpaid on your invoices, placed on the date it is actually due.
- Money going out — what is still unpaid on your purchase bills, placed on their due dates.
- Money going out regularly — the recurring costs that arrive whether or not anything was sold.
Not every rupee owed is a rupee coming
The part that makes this honest rather than optimistic is not counting receivables at face value. A customer who has always paid on time and a customer who has never once paid on time should not contribute the same amount to a week's expected inflow, even for identical invoices.
So each customer's history discounts what their invoice contributes. Nobody is written off entirely — even the worst payer is assumed to bring something — but the forecast stops pretending that everything owed arrives on the day it is due.
How this works in BizGST Pro
The Cash-Flow Forecast projects twelve weeks. Unpaid invoice balances are placed at their due date, weighted by how reliably that customer has paid in the past, using the same scoring the credit screen uses. Unpaid purchase bills are placed at their due dates at full value — your suppliers do not discount what you owe them. Active recurring expenses are spread evenly across the weeks.
Anything already overdue, on either side, lands in the first week rather than being dated in the past. That is the right assumption for money you are chasing now, and it is also why week one usually looks the worst.
The screen then names the lowest point in the twelve weeks and tells you whether it goes below zero.
The number you have to supply
One input is not read from your books: today's cash and bank balance. There is a field for it, and until you fill it in the projection starts from zero.
That does not make the forecast useless — the shape of the line, the weeks that dip and the weeks that recover, is entirely real without it. But the level is not. A line that dips below zero from a starting point of zero is telling you about the movement, not about a shortfall. Type in what you actually have before you read it as a warning.
What it cannot know
It projects from what has already been invoiced and billed. Sales you are confident of but have not raised an invoice for are not in it, and neither is a payment you have privately agreed will come early.
That makes it conservative on the way in, which is the safer direction for a tool whose whole job is to show you a squeeze before you are standing in it.