Cash Flow Simulator for SMBs — Simulate 3 financial scenarios
Simulate 12 months of cash flow in 3 scenarios: base, conservative, aggressive. Liquidity KPIs, alerts and AI analysis. Free, no signup.
Methodology and assumptions
How results are calculated, what we assume when modeling, and where the method loses precision.
Formula
Net flow(t) = Revenue(t) − Fixed costs(t) − Variable costs(t) · Balance(t) = Balance(t−1) + Net flow(t)
Assumptions
Levers are applied linearly to inputs (no cross effects).
Each scenario (base, conservative, aggressive) uses the same model with documented multipliers.
Runway projected up to 24 months at constant inflation.
Applicability limits
Does not simulate market dynamic responses to lever changes.
For CAPEX-heavy companies, add CAPEX manually as a point payment.
Models a single customer segment — for complex mixes, run separate models and aggregate.
Sources
Brealey, Myers & Allen — Principles of Corporate Finance (13th ed., McGraw-Hill).
Internal editorial estimate based on industry best practices.
How the cash flow simulator works
Step
Action
Output
1
Describe your business
Write about your business in your own words — revenue, expenses, clients, available cash. No need to follow a structure; the AI extracts it for you.
2
Deterministic simulation
The engine calculates month by month over 12 months across 3 scenarios (base, conservative, aggressive) using public, verifiable formulas. No black boxes.
3
KPIs and alerts
Visualize final cash, runway, average net flow, break alerts, and scenario comparison. Optionally, request an AI interpretation.
Need to define how much to charge before simulating your cash flow?
In six steps: define the period and opening balance; list expected real collections (not invoicing); list fixed outflows; list variable outflows; compute net flow (collections minus outflows); add to the opening balance and carry to the next month. Project over 12 months under three scenarios to see the minimum balance.
2What is the difference between cash flow and P&L?
The P&L records accrued income and expenses: what you invoiced and what you owe. Cash flow records what entered and left the bank. You can show $1M of profit in the P&L and be unable to cover payroll if your customers pay at 90 days.
3How often should I update my cash flow?
Monthly at minimum: you close the prior month with real data, add a new month at the end, and keep a rolling 12-month horizon. In times of stress (loss of a large customer, sector crisis) updates should be weekly.
4What do I do if my cash flow is negative?
First identify whether it is structural or one-off. If it is one-off (one month), renegotiate terms with one or two strategic suppliers. If it is structural (three months or more), act on DSO (deposits, factoring, early-payment discounts) and DPO (extend terms with non-critical suppliers). A revolving line is the last resort.
5What is the free cash flow formula?
Free cash flow = operating cash flow minus CAPEX (capital investment). It is the cash the company generates after maintaining its productive capacity. If it is sustainably negative, the business cannot grow on its own resources.
6Can I run my cash flow in Excel or do I need software?
Excel works for the first calculation but falls short on 12-month projections with scenarios and liquidity alerts. A web tool updated with real data eliminates human error and surfaces the projected minimum balance, which is the key survival indicator.
7What is a projected cash flow?
It is a forward-looking projection of cash inflows and outflows, based on accounts receivable with their collection dates, known fixed expenses, estimated variable expenses, and taxes. It is recommended to model it under three scenarios (optimistic, realistic, pessimistic) to see the range of plausible balances.
8What cash reserve should an SMB hold?
The international standard is 30 to 90 days of fixed operating expenses. The real median for US SMBs (JPMorgan Chase Institute 2024) is 27 days - below the safe minimum. If your projected minimum balance for the year is under 30 days of fixed spend, you are in the risk zone.
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What you'll see, what it prevents, and where you shouldn't trust it
Every simulator on Simúlalo ships with the same editorial structure: two hypothetical worked examples with numbers, the errors it helps you avoid, the model's declared limitations, and a visible financial disclaimer. The review is signed and dated.
Hypothetical case·Case A
A bakery selling more each month yet running short on cash
A bakery with monthly revenue of $180,000 MXN, variable costs at 55%, and fixed expenses of $52,000 sees sales grow 12% in the last quarter. When the simulator projects 12 months, the average collection period for stores (45 days) and prepaid flour purchases (paid within 7 days) eat into the cash buffer. In the conservative scenario, the initial $120,000 cash position enters the danger zone in month 5. The decision shifts: before scaling production, renegotiate terms with two wholesale customers and push payment terms to 30 days with the main supplier.
Illustrative figures. Does not represent a real company or an investment recommendation.
Hypothetical case·Case B
A SaaS with growing MRR but only 7 months of effective runway
A SaaS company with $42,000 MRR, 4.5% monthly churn, and $620 CAC decides to accelerate marketing. When simulating 12 months across three scenarios, the aggressive case projects $78,000 MRR — but net cash flow turns negative between months 3 and 8 due to the CAC ramp. With $310,000 in initial cash, effective runway falls to 7 months under the aggressive plan. The decision: split the plan in two — one quarter of restrained CAC to validate channels before scaling.
Illustrative figures. Does not represent a real company or an investment recommendation.
Common mistakes it helps you avoid
Things a team or decision-maker might assume that this simulator forces you to verify before committing.
Mistaking 'selling more' for 'collecting more': the simulator separates accrued revenue from real cash flow so you can see the gap between the two.
Treating every month as identical and ignoring seasonality plus the compounding effect of one bad month over the next.
Skipping the pessimistic scenario. Many businesses plan only the base case and break at the first 10% drop.
Assuming additional capital or credit lines always arrive in time: the simulator shows you how many months you can run without that crutch.
Model limitations
What the simulator does not do, and where you need a professional or a specialized tool.
Does not pull live bank rates or specific credit-line terms — you declare those parameters.
Does not predict future demand — it only projects the assumptions you provide, scenario by scenario.
Does not replace bookkeeping reconciliation: the KPIs are illustrative and do not substitute monthly closes with your accountant.
Does not include country-specific tax rules: validate VAT, income tax, or equivalent obligations separately.
When NOT to use this simulator
When you're about to commit to major financing (credit line over $1M MXN, an investment round, a commercial mortgage), don't use this simulator as the sole source of evidence. Treat it as a starting point for the conversation with your accountant and the bank; they'll ask for formal financial statements and auditable methodology. The simulator helps you walk into that meeting with sharper questions, not final numbers.
Financial notice
Results are illustrative estimates and do not constitute financial, tax, accounting, or legal advice. Use the results as a reference point and validate important decisions with a certified professional.
Editorial review
Reviewed by the Simúlalo editorial team
This simulator was reviewed by the people listed below before being published. The review covers the declared formula, the model's assumptions, the explicit limitations, and the absence of unsupported financial claims.
They are part of the Simúlalo editorial team, focused on building financial tools that are clear, educational, and easy to interpret.
Last updated: ·We update this page when the methodology, sources used, or simulator structure change.
This tool uses standard financial formulas and user-supplied data. To explain concepts like rates, credit, risk, or cash flow we consult public and official sources (Banxico, SAT, CONDUSEF, CNBV, Banco de España, IFRS, BIS, among others). Simúlalo is not affiliated with, sponsored by, or endorsed by these institutions.