Written by Behdad Karimi Dermeni, CPA · Reviewed by Maryam Ajorloo, CPA
A cash flow projection estimates the cash that will come into and go out of your business bank account each month, so you can see your closing balance before you get there. Start with the cash you have today, add expected customer payments, subtract every bill, tax remittance and owner draw, and roll the balance forward.
Most small business owners know whether they had a good year. Fewer know whether they will have enough cash on April 30, when the quarter's HST is due and a client is still "processing" your invoice. A cash flow projection template answers that question while you can still do something about it.
This free cash flow projection template is built for Canadian businesses: 12 months, in Excel, with no form to fill out. It already has lines for GST/HST, QST and PST, CRA instalments and payroll remittances, which are the outflows most generic templates leave out.
Once your projection is set up, the actuals are the easy part: connect your bank to ReInvestWealth and let your real numbers fill themselves in.
Download the free cash flow projection template
Download the cash flow projection template (Excel, free, no sign-up)
It opens in Excel, Google Sheets and Numbers. No email address required, and nobody will call you about it. Inside you get three tabs:
How to use: short fill-in instructions, so you can complete it without this page open.
12-Month Projection: the blank template. Yellow cells are inputs; everything else calculates. Enter your first month, the cash in your bank today, and a minimum cushion, and any month that dips below the cushion turns red and says LOW.
Example: a filled-in projection for an Ontario consultant who charges 13% HST and files quarterly, so you can see what a finished one looks like.
The template is organized into three blocks, read top to bottom:
Cash in: payments from customers (before sales tax), sales tax collected, other income, loans received, and owner contributions.
Cash out: 19 lines covering rent, software, insurance, contractors, wages, payroll remittances, loan repayments, equipment, sales tax remitted, income tax instalments, income tax balance owing, and owner draws or dividends.
Cash position: net cash flow, opening cash, and closing cash, which becomes next month's opening cash automatically.
Cash flow vs profit: why the projection matters
Profit is what your income statement says you earned. Cash is what your bank says you have. They are different numbers, and the gap between them is where small businesses get into trouble.
A few things that move cash without touching profit:
A client pays in 60 days. You earned the revenue in March. The money arrives in May.
You collect sales tax. The HST on your invoices lands in your account, but it belongs to the Canada Revenue Agency (CRA) and leaves again at filing time.
You buy a laptop. It is one big cash payment now, even though it is written off over several years through capital cost allowance.
You repay a loan or pay yourself. Loan principal and owner draws are not expenses, but they empty the account all the same.
So a business can be profitable on paper and still run short of cash in a specific month. (Profitable and broke at the same time is a surprisingly common combination.) The projection is how you see that month coming.
If you want the profit side of the story too, the Business Budget Calculator is the companion tool: the budget plans what you will earn and spend, and the cash flow projection shows when the money actually moves.
How to create a cash flow projection in 6 steps
Here is the rule of thumb that makes every step easier: record each amount in the month the money actually moves, not the month you invoice or receive the bill. Get the timing right and the rest is arithmetic.
Set your starting point. Enter the first month of the projection and the cash in your business bank account today. Use the real balance, not the balance you wish you had. Then choose a minimum cushion, for example one month of fixed costs, that you never want to dip below.
Estimate the cash coming in. For each month, enter what you expect to collect from customers, not what you expect to invoice. If clients usually pay in 30 days, March's work shows up in April. Put the sales tax you collect on its own line so it never gets mistaken for income.
List every cash outflow in the month it is paid. Start with fixed costs (rent, software, phone, insurance), then variable costs (contractors, supplies, marketing). Do not forget the annual and lumpy ones: insurance renewals, your accountant's year-end fee, equipment, and software billed once a year.
Add the Canadian tax outflows. Sales tax remittances, CRA income tax instalments, payroll remittances, and any tax balance owing at year-end. These are the lines that sink most projections, so the next section covers them in detail.
Calculate closing cash and roll it forward. Cash in minus cash out gives you net cash flow. Opening cash plus net cash flow gives you closing cash, which becomes next month's opening cash. The template does this for you across all 12 months.
Stress-test it, then update it monthly. Ask what happens if your biggest client pays a month late, or a slow month comes in 20% light. Then, at the end of each month, replace the estimate with what really happened and add a new month at the end. Our free bookkeeping template records the actual income, expenses and sales tax for each month, so the comparison takes minutes.
Canadian cash outflows most templates forget
Generic templates are often built for another country, and they quietly skip the payments that catch Canadian owners off guard. These are the ones to put in your projection on day one.
Sales tax remittances (GST/HST, QST, PST)
The sales tax you collect is held in trust and paid out when you file. How much and where depends on your province:
HST: Ontario (13%), Nova Scotia (14%), and New Brunswick, Newfoundland and Labrador, and Prince Edward Island (15%), all remitted to the CRA.
GST + PST: British Columbia, Saskatchewan and Manitoba charge 5% GST (to the CRA) plus a provincial sales tax that you remit to the province.
GST + QST: Quebec charges 5% GST plus 9.975% QST, both generally filed with Revenu Québec.
GST only: Alberta and the territories charge 5% GST.
The CRA assigns a GST/HST reporting period based on your annual taxable supplies: annual at $1.5 million or less, quarterly above that up to $6 million, and monthly above $6 million. You can choose to file more often. If you are an annual filer and your net tax was $3,000 or more, the CRA expects quarterly GST/HST instalments during the year, so put those in the projection too.
In the template, enter the tax you collect on the "Sales tax collected" line and the payment on the "Sales tax remitted" line in the month it is due. To estimate the amounts, the sales tax calculator works out the tax for any province.
CRA income tax instalments
If you are self-employed and your net tax owing is more than $3,000 ($1,800 in Quebec) in the current year and in either of the two previous years, the CRA expects income tax instalments on March 15, June 15, September 15 and December 15. That is four predictable payments, which makes them the easiest line in the projection to get right and the most annoying one to forget. The tax instalment calculator estimates what each one should be.
Corporations pay instalments too, monthly or, for many small Canadian-controlled private corporations, quarterly.
Corporate tax balance owing
A corporation's tax balance is due two months after its year-end, or three months for a Canadian-controlled private corporation that meets the small business conditions (the balance-due day rules list them). Note that the payment is due before the T2 return itself, which is due six months after year-end. If your year-end falls inside the projection window, add a line for it.
Payroll remittances
If you have employees, or pay yourself a salary through your corporation, the income tax, CPP and EI you withhold are not yours to keep either. Most small employers are regular remitters, and the CRA must receive the remittance by the 15th of the following month. In the template, enter net pay on the "Wages" line and the remittance on the "Payroll remittances to CRA" line a month later.
Here is where this part pays off: the business that sees these four lines coming on a calendar is calm in April. The one that does not is suddenly very interested in its line of credit.
This is exactly the kind of tracking ReInvestWealth handles for you: your bank transactions come in automatically and the AI Bookkeeper sorts out what is sales tax and what is income. See how it works.
A worked example: an Ontario consultant
Here is the first quarter from the Example tab in the template. It follows a sole proprietor consultant in Ontario who charges 13% HST, files quarterly, pays income tax instalments, and starts January with $12,000 in the bank.
January: $7,910 comes in ($7,000 in fees plus $910 HST). $7,465 goes out, including a $2,260 laptop and a $4,000 owner draw. Closing cash: $12,445.
February: a big client pays late, so only $5,085 comes in. A $1,500 contractor bill still goes out. Net cash flow is negative $1,620, and closing cash drops to $10,825. Nothing went wrong in the business; the money just arrived later.
March: the late payment lands and $10,170 comes in. The first income tax instalment of $1,500 goes out on March 15. Closing cash: $14,290.
March looks great. But $2,030 of that balance is the quarter's HST, after subtracting the HST paid on business purchases, and it goes to the CRA by April 30, the same month the accountant's year-end fee is due. The projection shows that in January, not on April 29.
Run the full 12 months in the template and you will also see net cash flow dip below zero again in June and July, when a contractor payment and an instalment land in June and the second-quarter HST remittance follows in July. None of them is a surprise; they are just easier to plan for six months out.
How to read your cash flow projection
Once the numbers are in, read the closing cash row from left to right. You are looking for two things.
A month below your cushion (a shortfall). You have time to act, which is the whole point. You can:
Speed up cash in: invoice the day work is done, shorten payment terms, or ask for a deposit on large projects. (The invoicing mistakes that slow cash flow are worth a read.)
Move cash out: shift a planned purchase to a stronger month, or spread a large bill over two.
Arrange credit before you need it: a line of credit is much easier to set up when your projection says you will not need it. The business loan calculator shows what a loan would cost each month, so you can add the repayment to the projection before you borrow.
A cushion that keeps growing (a surplus). That is good news, and it is also a decision. You can top up a tax reserve, pay down debt, or take a larger owner draw, knowing exactly which months can afford it.
If your income swings from month to month, the guide to managing irregular income in Canada pairs well with this template. Consultants can find more in how to manage cash flow as a consulting business.
12-month vs 13-week cash flow forecast
The template uses 12 months because that is what most planning, lenders and business plans ask for. It shows seasonal patterns, annual bills and the full tax calendar.
A 13-week cash flow forecast is the short-range version, tracked week by week. It makes sense when cash is tight, when you are about to make a big hire or purchase, or when a lender asks for one. The method is identical (opening cash, cash in, cash out, closing cash), only with weeks instead of months.
A practical approach: keep the 12-month projection as your map, and switch to a weekly view only for the stretch of months the map flags as tight.
Cash flow forecasting is one piece of financial planning. For the bigger picture (revenue goals, scenarios and growth planning), see these financial forecasting tips for small businesses.
Keep the projection honest with real numbers
A projection is only as good as the actuals you compare it to. The monthly habit takes about 15 minutes:
Pull last month's actual cash in and cash out from your books, not from memory.
Overwrite the estimate with the real figures, and note anything that surprised you.
Add one more month at the end, so you always have a full year in view.
The hard part is the first step, because it needs books that are up to date. That is where ReInvestWealth comes in. You connect your bank once, the AI Bookkeeper categorizes your transactions, and financial reports like your income statement and balance sheet are ready whenever you are. For Canadian businesses it also keeps track of the sales tax you collect and helps you file your GST/HST return, so the biggest line in your projection is already worked out.
Your spreadsheet does the forecasting. Your books do the remembering.
Frequently Asked Questions
Is a cash flow forecast the same as a cash flow projection?
Yes, for small business purposes the two terms mean the same thing: an estimate of the cash coming in and going out over the coming months, and the balance left at the end of each one. Some finance teams use "forecast" for short-range estimates, but the template and the method are identical.
How far ahead should a cash flow projection go?
Twelve months is the standard, because it covers seasonal swings, annual bills and the full tax calendar. Many lenders and business plan reviewers ask for 12 months, and some ask for 24. If cash is tight, add a 13-week weekly view for the next quarter alongside the 12-month projection.
How often should I update my cash flow projection?
Update it monthly. At the end of each month, replace the estimate with your actual cash in and cash out, look at what changed, and add a new month at the end so you always have a full year ahead. During a tight stretch, check it weekly.
Should I include GST/HST in my cash flow projection?
Yes, but on its own line. The GST/HST, QST or PST you collect lands in your bank account, so it is real cash in, but it leaves again when you remit. Keeping it separate stops it from inflating your income and puts the remittance in the right month.
What is the difference between a cash flow projection and a cash flow statement?
A cash flow projection looks forward: it estimates what will happen to your cash over the coming months. A cash flow statement looks back: it reports how cash actually moved during a past period, and it is one of the financial statements. You use the projection to plan and the actual results to check it.
Is this cash flow projection template free?
Yes. The template is a free Excel download with no sign-up and no form. It also opens in Google Sheets and Numbers. It includes a blank 12-month projection, a filled-in example for an Ontario consultant, and step-by-step instructions.
Plan the cash, then let the books keep up
A cash flow projection takes an afternoon to set up and a few minutes a month to maintain, and it turns "I think we're fine" into a number with a date on it. Download the template, put in your real opening balance, and add the four Canadian tax lines before anything else.
When you want the actual numbers to arrive on their own, connect your bank and let the AI categorize your transactions. Built by CPAs, with books ready for your accountant at year-end. Start free for 30 days.
A note from our CPAs: This template and guide are educational and cover the general rules for Canadian small businesses. Tax situations vary, so for advice on your specific circumstances, including your filing frequency and instalment amounts, talk to your accountant. (If they use ReInvestWealth, they'll already have clean books to work from.)
Written by Behdad Karimi Dermeni, CPA
Co-founder of ReInvestWealth and a founding community builder at Stripe. Behdad built ReInvestWealth to give smart, busy entrepreneurs CPA-level accounting without the CPA-level price tag. Read more · Connect on LinkedIn
Reviewed by Maryam Ajorloo, CPA
Maryam Ajorloo is the co-founder of ReInvestWealth and a CPA who specializes in small business tax, sales tax, and everyday bookkeeping. She helps entrepreneurs keep clean, audit-ready books and make sense of write-offs, filing deadlines, and the numbers behind their business. Read more · Connect on LinkedIn
