Posted on 28 February, 2019  |  3 mins

You’re a business owner, not Mystic Meg, so forecasting your cash flow might not be a particular strength. But knowing the intricacies of cash flow forecasting is a particular strength of our friends over at iwoca. Here are their top tips to peer ahead into your financial future—no crystal ball required—and how and when to apply funding to help.


Understanding cash flow and how to forecast it is essential to any business. Simply put, cash flow is the measure of the money coming in and going out of your business every month.

It can be fast and slow, go up and down, and there’s no turning back once you get going. Without proper forecasting, cash flow can seem like a bit of a rollercoaster; all the adrenaline without the g-force.

One moment, your sales are up and your cash is soaring, the next you’re replacing stock or paying taxes as your available funds head south. If cash flow is down, it can cause a negative reaction in your working capital, which is when a business might start to struggle.

Thankfully, there are ways to foresee what highs and lows are coming up on the track, and you don’t need a crystal ball to do it.

Teething problems

Businesses that are just starting out and looking to grow will often run into cash flow issues early on.

If your cash flow is down, the iwoca credit facility can be just the key to boosting access to working capital.

Olivia Smith runs Olivia & Pearl, a business which creates contemporary pearl jewellery, and used an iwoca loan to bridge her initial cash flow gaps, meaning that the business began to really thrive. Now she’s exhibiting at London Fashion Week.

Managing stock

Tips for forecasting your cash flow | iwoca | 9 Spokes

For a retail business, one step to maintaining your company’s cash flow is to make sure you’re managing your stock.

Understanding what stock is ‘fast moving’ and what is not will help you project sales, and although cash flow will naturally always fluctuate, you can see where the peaks and troughs will be.

The benefit of forecasting cash flow is that you can put finance in place for the rainier days when sales might not be so strong, or when you have a big bill coming up.

Not only will managing cash flow effectively help the day-to-day running of your business, but a business with good financial discipline will be more attractive to investors.

iwoca’s credit facility

iwoca’s credit facility is a fantastic tool to help you manage your short-term cash flow problems. Once you’ve forecasted your cash flow, and can see where the river gets a bit wider, you can build a bridge. This is especially useful for a business that suffers with cash flow issues borne out of seasonal demand.

If your business does the majority of its trading in the summer, winter might see a downturn in cash flow. Thanks to the speedy application and drawdown process, funds can be in your account in hours for when you really need it.

Sambrook’s Brewery

Duncan Sambrook, the founder of Battersea-based Sambrook’s Brewery, says that the greatest issue facing his business comes from cash flow and working capital. Duncan brews craft beer and ale, and his brewery was one of the first set up in the London brewing revolution. He uses iwoca’s credit facility to bridge the cash flow gap created by dealing with lots of transactions month on month.

He told us that working capital and cash flow is the one thing that can make or break a brewery like his. While he deals with a lot of stock, there are cash flow issues which come as the brewery grows.

His biggest cost is duty. Sambrook’s Brewery pays duty to the government for all the beer that they sell, but don’t get paid by their customers until five days after the duty is settled. This means that, every month, there is a huge swing for five days, and the bigger his brewery gets, the bigger that swing. The situation is volatile, and would create issues if he wasn’t able to forecast his cash flow properly and put finance in place.

Over time, Duncan says he’s learned how to forecast better, but not having access to enough working capital to cover that swing is still one of his biggest risks. That’s where iwoca steps in to help him cover the cash flow gaps.

Summing up

It’s easy to see why cash flow can cause so much turbulence. Whether it’s rainy days or sunshine ahead, it’s necessary to forecast cash flow first, so that you can be prepared.

Whether it’s sun cream, wellington boots or iwoca credit in hand, make sure you get your cash flow forecast covered.

Forecasting your cash flow | 9 Spokes

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