SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-cash-forecast-purpose

What is the main purpose of a cash flow projection?

It tests whether expected cash receipts can cover expected payments.

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  1. Plan whether cash covers bills ✔
  2. Settle every tax question
  3. Replace all financial statements

Why: A cash projection helps a founder see whether enough cash should be available when bills come due. That gives time to adjust spending, collections, or financing.

Huh, didn't know that: Seasonal businesses can use projections to plan large inventory purchases.

The dad joke
Why did the bill check the forecast? It wanted to know if cash was coming.
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References

Answer: Plan whether cash covers bills. A cash projection helps a founder see whether enough cash should be available when bills come due. That gives time to adjust spending, collections, or financing.

  1. Financial Management for a Small Business Participant Guide catalog.fdic.gov/catalog/sfc/servlet.shepherd/document/download/069t000000Bch4LAAR
    A cash flow projection is used to see if projected cash receipts (in flows) will be sufficient to cover projected cash disbursements (out flows).
    Checked 2026-10-11.

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