How to build a 13-week cash-flow forecast

1. Forecast cash movements, not accounting profit

A profitable month can still put pressure on cash if customers pay after payroll and suppliers fall due. Start with cash that is actually available at the forecast date. Keep restricted balances and an undrawn facility separate from that opening figure.

Use 13 weekly periods to look across roughly one quarter at a useful level of detail. Place each receipt or payment in the week it is expected to clear the bank. An invoice date, revenue entry or depreciation charge does not itself establish the cash date. This is a planning model, not a statutory cash-flow statement.

2. Gather evidence for the timing

Prepare a reconciled bank position, aged receivables and payables, payroll dates, tax and statutory payment schedules, debt commitments and planned capital spending. Add confirmed orders or other expected receipts only with an identified assumption and owner.

• Customer collections: use the expected payment date, collection history and disputed balances. Separate confirmed receipts from estimates.
• Supplier payments: schedule actual commitments, agreed credit terms and payments already instructed. Avoid counting the same payable twice.
• Payroll, taxes and financing: use the expected payment amounts and dates. Capture both borrowing and repayments rather than treating a facility limit as cash.
• Currency: keep the example in one reporting currency. If several currencies are involved, document conversion assumptions and the underlying balances.

3. Build a model that reconciles

Group receipts and payments so the model remains easy to review. Enter operating payments as positive amounts; the formula deducts them. Show new borrowing as positive and debt repayments as negative in the financing line.

The next week opens with the previous week’s closing balance. Include a management-defined minimum cash buffer and calculate headroom as closing cash less that buffer. A negative result flags a discussion; it does not automatically establish a loan requirement or an approved facility.

Write down material assumptions alongside the forecast: customer payment dates, uncertain amounts, exchange rates and any spending that depends on approval. Assign a person to validate each assumption.

4. Test the timing with a worked example

Assume a fictional business uses one reporting currency and begins Week 1 with 50,000 of available cash. It expects customer receipts of 40,000 and total operating payments of 53,000. There is no capital spending or financing movement in that week.

The downside case moves 15,000 of receipts into Week 2. It changes timing, not the total expected collection across the two weeks. Management can then review collection follow-up, discretionary spending or separately approved financing options before the payment date.

5. Compare actual cash and roll forward weekly

At each review, replace the completed week with actual cash movements and reconcile the closing balance to the bank. Explain material differences by amount and timing. A delayed receipt should be moved to its revised week rather than silently removed.

Roll the forecast forward by one week, add a new Week 13 and update the evidence supporting the next few weeks. Keep the prior version so a reviewer can trace changes. Discuss the lowest forecast closing balance, weeks below the buffer, overdue collections and decisions that need an owner and a date.

A cash forecast works best alongside the monthly management pack and receivables ageing. The bookkeeping team prepares the records and schedules; management remains responsible for commercial assumptions, payment priorities and approvals.