It's one of the most confusing moments in business: your income statement says you're profitable, and your bank account says you can't make payroll next Friday. Customers pay late, big bills cluster, growth ties up cash. A 13-week cash flow forecast is the simplest tool for seeing those moments weeks in advance.
Why 13 weeks
Thirteen weeks is one quarter. It's far enough ahead to give you time to act, and close enough that you can forecast with real detail, week by week, instead of guessing.
How to build it
- Start with today's cash. Use your actual bank balances, not the balance in your accounting system.
- Forecast cash coming in, week by week. Base it on when customers actually pay, not when you invoice. If a customer usually pays in 45 days, plan for 45 days.
- Forecast cash going out. Put payroll on its actual pay dates, then add rent, loan payments, tax payments, insurance, software, and known vendor bills.
- Add the known one-time items. Equipment purchases, annual renewals, bonuses, and estimated tax payments are easy to forget and hard to absorb.
- Calculate ending cash each week. That week's ending cash becomes the next week's starting cash.
- Set a minimum. Decide the lowest balance you're comfortable with, and flag any week that dips below it.
Keep it rolling
Update the forecast every week. Replace last week's estimates with what actually happened, add a new week at the end, and look at where your estimates were off. Over time, your forecast gets noticeably more accurate.
What to do when you see a gap
The value of seeing a shortfall weeks ahead is that you have options:
- Follow up on overdue invoices, or offer a small discount for early payment.
- Ask key vendors about adjusting payment timing.
- Delay purchases or hires that aren't urgent.
- Arrange a line of credit before you need it. Banks lend more easily when you aren't desperate.
Who needs one
Any business with tight cash, seasonal swings, fast growth, or a loan to manage benefits from a 13-week forecast. It's also one of the first things investors and lenders ask about, because it shows that you understand where your cash is going.
We'd set a minimum cash line and treat crossing it as an alarm, not a footnote. And we'd open a line of credit while business is good, because that's when banks are most willing to say yes.