Cash Forecast vs Actual: Find What Went Wrong

Keep the prediction before replacing it

Save a dated copy before entering actual results. Otherwise the forecast gradually becomes a record of what happened, and you lose the evidence needed to improve it.

Match bank accounts, dates and transaction scope. A card settlement still pending on Sunday belongs in the next week's actuals, even if the sale occurred on Friday. If a bank transaction remains unclassified, keep it in an unresolved row rather than leave it out of total cash.

Explain the $6,200 difference

Assumptions: AUD. Opening bank balance is $10,000 in both columns. Payments are shown as positive outflows. Cash-effect variance is actual minus forecast for receipts, and forecast minus actual for payments.

Item	Forecast	Actual	Effect on closing cash
Customer receipts	$20,000	$14,000	−$6,000
Supplier payments	$8,000	$7,000	+$1,000
Wages and other planned payments	$6,000	$6,000	$0
Unplanned repair	$0	$1,200	−$1,200
Closing balance	$16,000	$9,800	−$6,200

Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.

The $6,200 difference comes from three items: a $6,000 receipt is late, $1,000 of supplier payments hasn't cleared, and an unplanned repair cost $1,200. Each needs a different update.

Put a cause and an action beside every material variance

For a timing difference, retain the original invoice or bill reference, confirm the new expected date, and move the unpaid amount. For an amount difference, revise the estimate using the invoice or new information. For an omission, add the cash line and decide whether it could recur.

The person responsible should record the evidence. “Customer confirmed Friday” is more useful than “timing”. If the customer hasn't confirmed anything, show the receipt in a delayed-payment scenario rather than treating a new guess as certainty.

Rebuild the next week from $9,800

Assumptions: AUD. Week 2 originally expected $12,000 of other receipts and $9,000 of payments. The confirmed late receipt and uncleared supplier payment now both fall in week 2.

Step	Amount
Actual opening cash	$9,800
Other receipts	$12,000
Moved week-1 receipt	$6,000
Originally planned payments	−$9,000
Moved week-1 supplier payment	−$1,000
Corrected closing cash	$17,800

Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.

Leaving the old $16,000 opening balance in place would give $24,000, overstating cash by the same $6,200. Including the late invoice in both your receivables import and manual adjustment would overstate it by another $6,000.

Use a unique invoice reference to join the records. Mark whether an item is outstanding, paid or cancelled. If only part of an invoice arrived, carry the remaining balance, not the original full amount.

Improve the assumption that caused the miss

After several weeks, look for repeated patterns: settlement delays, delivery dates that move, or quarterly bills missing from the input list. Revise those assumptions in your 13-week forecast. A one-off repair doesn't prove the entire sales forecast is unreliable.

Set a review threshold that fits the business, but still reconcile the total bank movement. Several small differences can matter together. Use the sales pipeline worksheet when forecast receipts depend on work that hasn't been invoiced.

Key takeaways

• Preserve the original forecast and explain differences before overwriting it.
• Separate date changes, amount changes and missing items.
• Use actual opening cash and move outstanding balances once.

Where to get help

Xero's cash forecasting guide includes forecast-to-actual review. If actual cash won't reconcile, ask your bookkeeper to establish the bank position before changing the forecast.