What Is a 13-Week Cash Flow Forecast?
A 13-week cash flow forecast is a week-by-week projection of the cash that will come into and go out of a business over the next quarter. Each week ends with a projected cash balance. Read across the row and you can see, weeks in advance, when cash will run short.
Why 13 weeks
Thirteen weeks is exactly one quarter, so the forecast lines up with quarterly items like estimated tax payments and loan covenant tests. It is also about as far ahead as a company's real transactions reach. Open invoices, unpaid bills and the payroll calendar usually cover the next 30 to 90 days. Past that point a forecast stops being built from actual transactions and starts being built from assumptions.
Weekly columns matter too. A monthly forecast can show a healthy balance at month-end while hiding the payroll week in the middle when the account dipped below zero.
What goes into one
- Opening cash, tied to reconciled bank balances
- Collections from open customer invoices, adjusted for how late customers actually pay
- New sales not yet invoiced, with a realistic collection lag
- Payroll on its real schedule, including taxes
- Vendor payments from the payables aging
- Fixed costs like rent, insurance and software
- Non-operating items such as loan payments, taxes, equipment and owner draws
Signs your business needs one
- You pay staff or suppliers before customers pay you
- Sales swing by season
- You are opening a location, buying equipment or hiring
- A lender or investor wants regular cash reporting
- You have been profitable on paper and still stressed about payroll
If none of these apply and cash is steady, you probably don't need a forecast. Good bookkeeping is enough.
What makes a forecast trustworthy
A forecast is only useful if it is right often enough to act on. That means opening cash ties to the bank, receivable and payable detail ties to the general ledger, and every month the forecast is compared with what actually happened. The comparison is where the forecast gets better over time.
See our services for one-time and monthly options, or read about planning cash for a slow season.