Can You Explain The Purpose Of A Cash Flow Forecast And Also Explain The Consequences Of A Business Not Developing A Cash Flow Forecast?

A Cash Flow forecast is a short-term plan on how your business uses cash in the following areas:
Operations
Financing
Investing.

It will help you plan your business, since you will plan on how cash is to be used and you will see any diffencies that may arise.

You should have a regular Cash Flow Statement prepared every month that compares actual results to forecast.

I would also prepare a budget that is a longer plan (12 months, 18 months, etc).

Anthony
Rant & Rave Central