Reviewed and updated October 16, 2026

Make a short-term forecast

Start with available bank cash and list expected customer collections and payments by week. Include payroll, rent, supplier bills, debt payments and tax deposits. Update the forecast when a large invoice is delayed or a major purchase changes. Forecasting exposes timing gaps that a monthly profit-and-loss statement cannot show.

Habit one is reconciling bank accounts promptly. Habit two is billing customers consistently. Habit three is reviewing receivables by age and following up on overdue invoices. A sale recorded in the books does not fund payroll until the money is collected.

Separate obligations from spending money

Habit four is keeping business and personal transactions separate. Habit five is reserving cash for sales tax, payroll taxes and income-tax payments according to actual obligations. Habit six is scheduling vendor payments against due dates and collection expectations rather than paying bills randomly.

Sales tax and employee withholding may sit in your account temporarily, but they are not unrestricted operating cash. Owner withdrawals should be visible and planned. Loan proceeds improve cash temporarily while creating repayment obligations; they do not prove the business is profitable.

Review the drivers every month

Habit seven is comparing gross margin with prior periods. Habit eight is reviewing inventory and equipment purchases before committing cash. Habit nine is comparing the forecast to what actually happened, then changing assumptions.

A simple monthly review should connect the profit-and-loss statement, balance sheet and cash forecast. Ask why receivables increased, why supplier costs moved and whether upcoming tax payments are funded. Good bookkeeping turns those questions into figures you can act on. Jacobwise & Co. can help organize monthly records and support a tax plan that works alongside your operating cash needs.

Official sources

This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.