Profit does not equal cash. Sales may be unpaid, stock may absorb working capital, loan instalments include capital, and VAT or payroll taxes can fall due before customers settle.
Build a rolling cash-flow forecast
Start with the opening bank balance and forecast actual collection and payment dates, not only invoice dates.
Schedule customer receipts using debtor ageing, contractual terms and realistic collection assumptions.
Map supplier payments, payroll, rent, loan instalments, VAT, PAYE and provisional tax to their expected dates.
Separate recurring commitments from discretionary spending and model a slower-sales or delayed-payment scenario.
Compare forecast to actual cash weekly and update assumptions, collection actions and purchase decisions.