This matters more as the year winds down. Christmas shutdowns, slower customer payments, and a pile of bills landing in the same few weeks can squeeze even a profitable business.

Why Profit Does Not Protect You From a Cash Shortfall

Profit and cash are not the same thing. A sale counts as profit the day you invoice it on an accruals basis. It only counts as cash the day the customer pays. If wages, rent and suppliers are due before that happens, the business can be profitable and still run short.

That gap is why a cash flow forecast is more useful than a profit and loss report for day to day decisions. Business Victoria calls it the most important tool any business has, because it shows you the weeks when more cash is going out than coming in.

How to Build a Cash Flow Forecast

Cash flow forecasting does not need specialist software. A spreadsheet is enough, and the Australian Government’s business site has a free cash flow forecast template you can start from.

Begin with the cash in your bank today, then work forward week by week.

First, list your expected receipts. Record these for when the customer will actually pay, not when you send the invoice. For example, if a client usually takes 45 days to pay, forecast 45 days.

Second, list what you need to pay. Include items that are easy to forget, such as GST, PAYG withholding, superannuation, loan repayments, insurance, and annual renewals.

Third, add your receipts to the opening balance, subtract your payments, and the result is that week’s closing balance. That closing balance becomes next week’s opening balance. Any week that shows a negative balance indicates a problem you now have time to fix.

Finally, keep your forecast current. A forecast that is never reviewed is merely a guess. Compare it with what actually happened each month and adjust the future forecasts accordingly.

Your Cash Flow Forecast Needs to Reflect Payday Super

Since 1 July 2026, employers have had to pay super at the same time as wages. The contribution generally needs to reach the employee’s fund within seven business days of payday, rather than once a quarter.

That changes the shape of your cash flow. Super is no longer one large payment every three months. It leaves the account with every pay cycle. Your cash flow forecast should show it alongside wages, not as a separate quarterly line.

The Australian Government also suggests putting money aside for tax and super in a separate bank account, so the funds are there when they fall due.

What a Cash Flow Forecast Helps You Decide

If the forecast shows a tight week, you have options while they are still cheap. You can chase overdue invoices, invoice earlier, or delay a purchase that is not urgent. You can also ask suppliers for longer terms, for example asking for 60 days instead of 30, which lets you hold on to cash for longer.

If the shortfall is bigger, you can arrange funding early, while the business still looks strong to a lender. Those options narrow quickly once the cash has run out. The same habit connects to the numbers we covered in How to Make Better Business Decisions Using Your Financial Data. Debtor days and working capital feed directly into your forecast, so checking them together gives you a much clearer picture.

Build Your Cash Flow Forecast Before the Christmas Slowdown

November is a good time to do this. You can still see all of December and January, including shutdown weeks, slower customer payments, and any annual costs that fall due.

Forecast through to the end of February. If you can identify a tight week now, you can act on it immediately.

At Optima Partners, our Business Advisory team helps Australian business owners with cash flow forecasting, building a forecast that reflects how their business truly operates. If you would like assistance, or want to see where your business stands first, try our free Financial Health Check or get in touch with us here.