Can an Accountant Help Me Build a Cash Flow Forecast for Investors?

Introduction

When seeking investment, one of the first things investors look for is a realistic cash flow forecast. It shows how well you understand your business finances and whether you can manage cash responsibly. While it is possible to create one yourself, most business owners benefit greatly from having an accountant build or review it. A skilled accountant not only ensures your forecast is accurate but also makes it credible to investors.

This article explains what a cash flow forecast is, who needs one, how an accountant can help, and what to consider before presenting it to potential investors.

What is a Cash Flow Forecast?

A cash flow forecast estimates how much money will move in and out of your business over a set period, usually monthly or quarterly. It predicts your future cash position by tracking incoming payments from customers, outgoing expenses such as rent and salaries, and other financial commitments.

Unlike a profit and loss statement, which focuses on income and expenditure for accounting purposes, a cash flow forecast focuses purely on the timing of real cash transactions. It tells you whether your business will have enough money available to operate smoothly and when extra funding might be needed.

Why Investors Care About Cash Flow Forecasts

Investors want reassurance that your business can manage its money wisely. A cash flow forecast helps them see when your business is likely to need funding and whether projected growth is sustainable. It also highlights your understanding of financial planning.

An investor will use your forecast to assess risk. For example, if your forecast shows large outgoings before revenue arrives, they can see the period when cash will be tight. This allows them to decide whether to invest, when to invest, and what level of funding you require.

How an Accountant Can Help Build a Cash Flow Forecast

An accountant plays a key role in developing a reliable and investor-ready cash flow forecast. Their expertise ensures your figures are grounded in evidence and compliant with UK accounting standards.

They can help by:

• Analysing past data to identify trends and seasonality in your income and expenses

• Adjusting for VAT, PAYE, and tax liabilities, which are often overlooked in DIY forecasts

• Creating different scenarios such as best-case, worst-case, and realistic outcomes

• Linking the forecast to your business plan so it aligns with your growth targets

• Producing investor-friendly reports and charts that clearly show when funding is required

A good accountant can also use forecasting software that integrates directly with your bookkeeping system, such as Xero or QuickBooks, ensuring real-time updates and fewer manual errors.

Real-World Example

Imagine a small tech start-up seeking £150,000 in seed investment. The founders have sales projections but no clear view of cash timing. Their accountant reviews past expenses, calculates VAT and payroll obligations, and builds a 12-month cash flow forecast.

The forecast reveals that the company will run out of cash in month eight if growth is slower than expected. With this insight, the founders revise their strategy and secure funding before that point. When they present the forecast to investors, it shows transparency and planning ability, increasing their chances of approval.

Legal and Tax Considerations

When creating a cash flow forecast, your accountant will consider key compliance points. These include:

• Corporation tax and VAT payment deadlines which affect monthly cash positions

• PAYE and National Insurance obligations that must be accounted for

• Loan interest and repayment schedules if you already have business borrowing

By including these obligations, your forecast provides a realistic picture of how much working capital is available at any point in time. This level of detail reassures investors that your forecast reflects genuine cash requirements rather than simple estimates.

Cost of Using an Accountant

The cost of having an accountant prepare a cash flow forecast varies depending on the complexity of your business. For a small start-up, expect to pay between £250 and £750 for a short-term projection. Larger companies or those needing multi-scenario forecasting may pay £1,000 or more.

Although this is an extra expense, it often proves worthwhile. A professionally prepared forecast can increase investor confidence, improve decision-making, and help avoid cash shortfalls that could cost far more in the long term.

Alternatives to Using an Accountant

Some small business owners prefer to create their own forecasts using tools such as Excel or accounting software templates. While this can work for simple businesses, errors are common without professional input. Mistakes in VAT timing or loan repayments can quickly distort your projections.

If you decide to prepare your own, consider having your accountant review it before presenting it to investors. A short review costs less than a full build and ensures your figures are credible.

Tips for a Strong Investor-Ready Forecast

1. Base assumptions on evidence. Use realistic figures drawn from your actual data.

2. Include tax and payroll payments. These are often missed and can skew results.

3. Plan for different outcomes. Investors like to see best-case and worst-case scenarios.

4. Keep it simple to follow. Avoid jargon and present numbers clearly.

5. Update regularly. Your forecast should evolve as your business changes.

Common Mistakes to Avoid

• Overestimating revenue or underestimating expenses

• Ignoring tax liabilities or loan repayments

• Failing to account for delayed customer payments

• Presenting the forecast without supporting assumptions

• Leaving out sensitivity analysis that shows how results change under different conditions

Conclusion

A well-built cash flow forecast is one of the most important tools for securing investment and managing your business effectively. While it is possible to create one yourself, involving an accountant adds professionalism, accuracy, and credibility. They bring a deeper understanding of tax, compliance, and financial structure, helping you present a forecast that investors can trust.

In short, yes — an accountant can absolutely help you build a cash flow forecast for investors, and doing so could be the difference between securing funding and missing out.