Long-term forecast: This normally spans between a year and five years. Medium-term forecast: This is done on a quarterly basis (covering approximately a 13-week window) and can be helpful in planning and budgeting operating expenses in order to improve business processes. It helps you identify whether there’s excess cash to invest towards business growth or there are emergency funding needs in the immediate term. Short-term forecast: This forecast is done for the upcoming 30 days. At a basic level, a cash flow forecast can tell you if your business has negative or positive cash flow at a given time. Cash flow forecasting is a way of predicting a business’s financial position by estimating the amount of money that is expected to flow in and out of the business.
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