Start from the bank balance, not the profit
A profitable business can still run out of cash. Profit counts a sale when you invoice it; the bank only sees it when the customer pays. Stock bought this month for sales next quarter, a loan repayment that is not an expense, and the VAT you collect on behalf of SARS all move cash without touching profit. A cash flow forecast follows the bank account, so the opening figure is the balance on your statement on the first day of the first month.
Building a forecast you can rely on
Put receipts in the month the money will arrive. If customers pay 45 days after invoice, a large order delivered in November is a January receipt. Base sales on the last six to twelve months of actual deposits rather than on targets, and use the growth rate sparingly: 1% a month compounds to about 13% over a year.
Payments go in the month they leave the account. Most lines are steady, but the ones that catch businesses out are the lumpy ones: annual insurance premiums, audit and accounting fees, the CIPC annual return, December bonuses and the thirteenth cheque, equipment replacement, and provisional tax payments. Type those into the months they fall. Salaries here are net pay; the PAYE, UIF and SDL deducted from them is a separate line because it is paid a month later.
When VAT and PAYE leave the account
Employers declare and pay PAYE, UIF and SDL on the EMP201 by the 7th of the month after the payroll month. When the 7th falls on a weekend or public holiday, the deadline is the last business day before it. October payroll taxes are therefore an early-November payment. Use the PAYE calculator to estimate the monthly amount.
VAT runs on the tax period SARS gives you. Most small vendors file every two months: Category A periods end in January, March, May and the other odd months, Category B periods end in the even months. If you file and pay through eFiling, the return and payment are due on the last business day of the month after the period ends. A Category B vendor's VAT on September and October sales leaves the bank at the end of November. Manual filers, and anyone who files on eFiling but pays another way, must pay by the 25th. That is why the example VAT line above has a payment every second month and zero in between. The SARS deadline checker lists the exact dates.
Worked example: the December squeeze
A business starts Nov 2026 with R20,000 in the bank. Customers pay R120,000 a month, regular costs and salaries are R104,000, and VAT of R14,000 is paid every second month. In Dec 2026 the business also pays December bonuses of R45,000 and the first VAT payment. That month the balance falls to -R7,000, the lowest point of the year, even though the year as a whole ends R83,000 in credit. Seeing that in October gives the owner time to ask the bank for an overdraft facility or move the bonus to January.
Debtor days: how fast you get paid
Debtor days are trade debtors divided by credit sales, multiplied by 365. With R250,000 owed by customers on R1,825,000 of annual credit sales, debtor days are 50. If your terms are 30 days, customers are paying about 20 days late on average, and collecting on time would release roughly R100,000 in cash once. The table shows how much cash sits with customers at different collection speeds on R100,000 of credit sales a month.
| Debtor days | Cash owed by customers at any time |
|---|---|
| 30 | R98,630 |
| 45 | R147,945 |
| 60 | R197,260 |
| 90 | R295,890 |
Customers who go well past terms may owe you interest; the late payment interest calculator works it out.
When a month goes below zero
A red month is a warning, not a verdict. Look at what drives it. If it is timing, such as a VAT payment landing in the same month as bonuses, an overdraft arranged in advance costs far less than a bounced debit order. If the balance keeps sliding, the business is spending more than it collects, and the fix is in pricing, costs or volume. The break-even calculator shows the sales you need to cover fixed costs.
Frequently asked questions
What is the difference between a cash flow forecast and a budget?
A budget plans income and expenses when they are earned and incurred. A cash flow forecast plans when money actually arrives in and leaves the bank account. A sale invoiced in March and paid in May is March income in the budget and a May receipt in the forecast.
When does PAYE leave my bank account?
PAYE, UIF and SDL deducted from salaries in one month are declared on the EMP201 and paid by the 7th of the next month. If the 7th falls on a weekend or public holiday, the deadline moves to the last business day before it. So October payroll taxes are a November payment in your forecast.
When is VAT paid?
Most small vendors have two-month VAT periods. If you file and pay on eFiling, the VAT201 and payment are due by the last business day of the month after the period ends. Manual returns are due by the 25th, and so is payment made other than through eFiling. Enter VAT in the month it is paid, not the month it was charged.
Should I include VAT in sales receipts?
Yes. Customers pay you the VAT-inclusive amount, so receipts should include VAT, and supplier payments should include the VAT you pay them. The net VAT then goes out as its own line in the months you settle with SARS.
How far ahead should a small business forecast cash?
Twelve months is the usual horizon, updated monthly with actual bank figures so the forecast rolls forward. Businesses that are short of cash often run a weekly forecast for the next 13 weeks as well, because a monthly view can hide a dip in the middle of a month.
What are debtor days and why do they matter?
Debtor days measure how long customers take to pay: trade debtors divided by credit sales, times 365. A business with R250,000 owed on R1,825,000 of annual credit sales has 50 debtor days. Getting that down to 30 would bring in about R100,000 of cash once.
Is my forecast saved?
Your figures are kept as a draft in this browser only, so they are there when you come back on the same device. Nothing is sent to us. Download the CSV to keep a copy or share it with your accountant or bank.