How do I model quarterly tax payments in a cash flow forecast?

[Jerry_J]

I’m trying to build a more reliable rolling cash flow forecast for my small service business, but I keep getting tripped up on how to accurately project my quarterly tax payments. I never seem to get the timing right, and it throws my predicted cash balance off for months. How do others handle the irregular timing of these larger, non-monthly outflows?

[LukeJ]

I finally split off a reserve and started moving a small fixed percentage of every invoice into it. It wasn’t fancy, but when the quarterly hit came, the cash balance didn’t swing as hard as it used to.

[CharlesS]

Honestly I’m not sure the problem is timing alone. We had months where revenue barely moved but expenses spiked, so the forecast still looked wonky. Maybe the bigger fix was rethinking the revenue cadence rather than chasing the quarterly date.

[OliviaHM]

One time I tried forecasting with a separate quarterly line item and updated it every month, but I kept forgetting to update the actuals and ended up chasing my tail. Still, having that bucket helped me sleep better.

[EvelynIL]

I wonder if the real issue is whether the thing you’re modeling is even the right thing. If most payments are monthly from clients but the big outlays are quarterly, you might be solving the wrong problem with the model. Not sure.