The 13-week cash flow forecast, explained on one page
Profit tells you whether the business works. The 13-week forecast tells you whether you can make payroll on the 15th. How we build one.
By Ansel Rourke
5 min read
Most owners we meet know their profit for last year and very little about their cash for the next three months. The 13-week cash flow forecast fixes that: one row per week, starting with the cash in the bank today.
What goes in
Cash in: customer payments by the week you expect them, not the week you invoiced. Cash out: payroll on its actual dates, rent, loan payments, sales tax, estimated taxes and the large bills you already know about. The difference rolls forward into next week’s opening balance.
Why thirteen weeks
Thirteen weeks is one quarter. It is short enough to be accurate and long enough to show a problem while you can still do something about it: chase a late customer, move a purchase, or draw on a line of credit before you need it rather than after.
Keeping it honest
A forecast is only useful if it is compared with what happened. Every Monday we replace last week’s estimate with the actual numbers and note why they differed. After a month, the forecast gets noticeably better, and so does the conversation with your bank.
Doing it yourself
A spreadsheet is enough. Start with your bank balance, list the next thirteen Fridays across the top and fill in only what you know for certain. If you want one built in your own file and handed over with a walkthrough, it is a fixed $1,800.
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