Opening Balance
AED 50,000
Net Monthly
AED 5,000
Final Balance
AED 110,000
| Month | Inflows | Outflows | Net Flow | Balance |
|---|---|---|---|---|
| Month 1 | AED 40,000 | AED 35,000 | AED 5,000 | AED 55,000 |
| Month 2 | AED 40,000 | AED 35,000 | AED 5,000 | AED 60,000 |
| Month 3 | AED 40,000 | AED 35,000 | AED 5,000 | AED 65,000 |
| Month 4 | AED 40,000 | AED 35,000 | AED 5,000 | AED 70,000 |
| Month 5 | AED 40,000 | AED 35,000 | AED 5,000 | AED 75,000 |
| Month 6 | AED 40,000 | AED 35,000 | AED 5,000 | AED 80,000 |
| Month 7 | AED 40,000 | AED 35,000 | AED 5,000 | AED 85,000 |
| Month 8 | AED 40,000 | AED 35,000 | AED 5,000 | AED 90,000 |
| Month 9 | AED 40,000 | AED 35,000 | AED 5,000 | AED 95,000 |
| Month 10 | AED 40,000 | AED 35,000 | AED 5,000 | AED 100,000 |
| Month 11 | AED 40,000 | AED 35,000 | AED 5,000 | AED 105,000 |
| Month 12 | AED 40,000 | AED 35,000 | AED 5,000 | AED 110,000 |
What is cash flow?
Cash flow is the movement of money in and out of your business. It measures the actual cash available at any point in time. Even profitable businesses can run into trouble if cash flow is poorly managed, as expenses often need to be paid before revenue is collected.
Positive vs negative cash flow?
Positive cash flow means more money coming in than going out, allowing you to save, invest, or grow. Negative cash flow means outflows exceed inflows, requiring you to draw on savings or borrow. Maintaining positive cash flow is essential for business survival.
How to improve cash flow?
Invoice clients promptly, offer early payment discounts (e.g., 2% for payment within 10 days), negotiate longer terms with suppliers, reduce unnecessary expenses, maintain a cash reserve of 3-6 months, and consider invoice factoring for large outstanding invoices.
Note: This is a simplified forecast with constant monthly flows. Real cash flow varies due to seasonal changes, late payments, and unexpected expenses.
Why tracking the money coming in and going out is vital for any UAE business
What is a cash flow forecast?
A cash flow forecast is a plan that shows how much money you expect to come into your business and how much you expect to spend over a set period, usually 12 months. It helps you spot months where you might run short of cash so you can plan ahead. For example, if your rent is AED 15,000 per month and you expect AED 40,000 in sales, you can see what is left for wages and other costs.
Why is cash flow especially important for UAE businesses?
Many UAE businesses deal with long payment terms, sometimes 60 to 90 days. Even a profitable company can struggle if clients pay late. A cash flow forecast helps you plan around these gaps. It is also useful when budgeting for annual costs like trade licence renewals (AED 10,000 to AED 50,000) and visa renewals.
What counts as a cash inflow?
Cash inflows are all the money coming into your business. This includes sales revenue, client payments, VAT refunds from the FTA (Federal Tax Authority), deposits, loans received, and investment income. Only count money when it actually lands in your bank, not when you send the invoice.
What counts as a cash outflow?
Cash outflows are all the money leaving your business. Common examples include rent, salaries, visa costs, WPS (Wage Protection System) transfers, VAT payments to the FTA, supplier bills, insurance, and equipment purchases. For instance, a small office in Dubai might spend AED 8,000 on rent, AED 25,000 on wages, and AED 2,000 on utilities each month.
What is the difference between profit and cash flow?
Profit is the difference between your total income and total expenses on paper. Cash flow is the actual money available in your bank account right now. A business can be profitable on paper but still run out of cash if customers have not paid their invoices yet. That is why both measures matter.
How can I improve my cash flow?
Send invoices as soon as work is done, offer a small discount (for example 2%) for early payment, negotiate longer payment terms with your suppliers, and keep a cash reserve covering 3 to 6 months of expenses. Some UAE businesses also use invoice factoring, where a finance company pays you up front for your outstanding invoices.
Does corporate tax affect my cash flow forecast?
Yes. Since June 2023, UAE businesses earning more than AED 375,000 in taxable profit pay 9% corporate tax. You need to include this in your forecast as a quarterly or annual outflow. For example, if your annual profit is AED 500,000, the tax on the amount above AED 375,000 would be AED 11,250 (9% of AED 125,000).
FTA-Aligned: Based on 2025 FTA rates and regulations. For personal advice, speak to a qualified tax consultant.
Disclaimer: This calculator provides estimates based on current UAE Federal Tax Authority rates and MOHRE labour law provisions. It does not constitute professional tax, financial, or legal advice. Your actual entitlements may differ depending on your individual circumstances, employment contract, and applicable free zone regulations. Always consult a qualified adviser before making financial decisions. Read our terms
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