Plenty of profitable businesses run out of cash. Customers pay late, a big supplier invoice lands the same week as payroll, or a tax payment gets forgotten. A 13-week cash flow forecast is the simplest tool I know for seeing that coming.
Why 13 weeks?
Thirteen weeks is one quarter. It’s long enough to spot a problem while you can still do something about it, and short enough that your estimates stay realistic. Weekly columns matter because cash problems happen in specific weeks, not averaged across a month.
What goes into the forecast
You need three blocks of rows:
- Opening cash: the actual bank balance at the start of the week
- Cash in: customer receipts, expected by the week you realistically think they’ll arrive, not the invoice due date
- Cash out: payroll, rent, suppliers, loan repayments, tax payments, software, and anything irregular like insurance or equipment
Closing cash for one week becomes opening cash for the next. That’s the whole model.
The four numbers to check every week
- Lowest closing balance in the next 13 weeks, and which week it falls in
- Overdue receivables: invoices past due that the forecast is counting on
- Large one-off payments coming up: tax, annual renewals, equipment
- Forecast vs actual for last week: where were you wrong, and why?
Keep it honest
The most common mistake is optimism. If a customer usually pays 45 days after invoice, forecast 45 days, even if your terms say 30. If you’re not sure a deal will close, leave it out and treat it as upside.
A forecast that’s usually a bit pessimistic is far more useful than one that’s usually a bit wrong in your favour.
The 30-minute weekly routine
- Update opening cash with the real bank balance
- Replace last week’s forecast with actuals
- Roll the forecast forward by one week
- Adjust receipts for any customer who has gone quiet
- Look at the lowest-balance week and decide if anything needs to move
What to do when you see a gap
Seeing a shortfall eight weeks out gives you options: chase specific invoices, ask a supplier for different terms, move a purchase, or talk to your bank before you need the money rather than after. Seeing it the same week gives you very few.
A spreadsheet is enough to start. Once the routine sticks, the same structure can move into a dashboard that pulls actuals from your accounting software automatically.