Business Improvement

Build a 13-week cash flow forecast

See a cash shortage weeks before it happens, while you still have time to act.

Intermediate10 min read5 steps

What you need

Set up 13 weekly columns
Thirteen weeks is about one quarter: far enough to see problems, and near enough to be reasonably accurate. Put weeks across the top and these rows down the side: opening cash, money in, money out and closing cash.
Enter money coming in, when it will really arrive
Use the date you expect payment, not the invoice date. If a customer usually pays 15 days late, plan for that. Be careful with sales you have not yet won, and keep them separate from confirmed invoices.
Enter all money going out
Include salaries, rent, suppliers, loan payments, tax, utilities and one-off costs. Costs that are forgotten here are what usually cause surprises.
4
Add the formulas
In this layout, row 2 is opening cash, row 3 is money in, row 4 is money out and row 5 is closing cash. Each week opens with the previous week's closing balance. Put your minimum safe balance in B8.
```
B5:  =B2+B3-B4          closing cash for week 1
C2:  =B5                opening cash for week 2
B6:  =IF(B5<$B$8,"LOW","OK")
```
Act early, then update weekly
Where a week shows LOW, you still have choices: chase overdue invoices, move a non-urgent purchase, negotiate payment terms or arrange finance. Each week, replace the forecast with actual figures and add a new week at the end.
A profitable business can still run out of cash. Profit shows what you earned, while this forecast shows what you can actually pay.

We can plan, build and hand it over to your team.