A 13-week cash flow forecast shows, week by week for the next quarter, the cash you expect to receive and pay and the resulting closing balance. It is the single most useful tool for a business with tight cash, because it shows problems weeks before they arrive.
Step 1: Start with today's cash
Opening balance = cash in hand + bank balances (net of overdraft used). Use actual balances, not book balances.
Step 2: List receipts by week
- Take your debtor ageing. For each customer, estimate the week they will actually pay, based on their past behaviour, not the due date.
- Add cash sales and other expected receipts (loans, refunds, asset sales).
Step 3: List payments by week
- Suppliers from your creditor ageing, by the week you plan to pay.
- Salaries, rent, EMIs, GST, TDS and other statutory dues on their dates.
- Planned capital purchases.
Step 4: Calculate weekly closing cash
Closing cash = opening + receipts − payments. The closing of week 1 is the opening of week 2.
Step 5: Find the pressure weeks
Highlight weeks where closing cash falls below your minimum comfortable balance. Decide in advance: chase specific collections, move a payment, or arrange funding.
Step 6: Roll it every week
Every week, replace the oldest week with actuals, add a new week 13, and compare actual with forecast. Big differences show where your assumptions are wrong.
