Stop being surprised by cash crunches. A 13-week cash flow forecast transforms reactive cash management into proactive financial planning.
This step-by-step guide shows you how to build and maintain a rolling forecast that keeps you ahead of cash flow problems before they become crises.
Why 13 Weeks?
The 13-week timeframe represents a full quarter. It offers the right balance: short enough to produce reliable projections, long enough to spot problems and take corrective action.
Longer forecasts become increasingly unreliable. Shorter ones don't give you enough runway to respond to issues.
The Three Essential Components
Every 13-week cash flow forecast needs three elements:
Beginning Cash - Your current funds in checking, money market, and savings accounts. This is your starting point for week one.
Cash Inflows - All sources of cash entering the business:
- Customer payments on invoices
- Cash sales
- Loan proceeds
- Owner investments
- Other income
List inflows in order of certainty. Known payments (like confirmed customer deposits) come first. Estimated collections (like expected A/R payments) come later.
Cash Outflows - All uses of cash leaving the business:
- Payroll and benefits
- Rent and utilities
- Inventory purchases
- Loan payments
- Vendor payments
- Tax payments
List outflows by size and importance. This helps you prioritize if cash gets tight.
Step-by-Step Building Process
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Start with your current position. Pull your exact cash balance as of today. This is your week one opening balance.
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Use cash basis, not accrual. This is critical. The forecast tracks when money actually enters and leaves your bank account, not when transactions are recorded. An invoice you send this week doesn't become a cash inflow until the customer pays. A bill you receive this week doesn't become a cash outflow until you write the check.
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Forecast your receivables. Review each customer and their payment habits. What are their payment terms? How quickly do they actually pay? Are any payments confirmed or scheduled? If a customer has net-30 terms but typically pays in 45 days, use 45 days in your forecast. Accuracy matters more than optimism.
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Map your disbursements. Work through each expense category. When is payroll? Which weeks? When are rent and utilities due? What vendor payments are scheduled? When are loan payments due? What tax deposits are required? Pull 6-12 months of transaction history to identify patterns you might forget.
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Calculate weekly ending cash. For each week: Beginning Cash + Inflows - Outflows = Ending Cash. That ending cash becomes next week's beginning cash. Repeat for all 13 weeks.
Maintaining Your Forecast
A 13-week forecast requires weekly updates. Every Monday (or your chosen day):
- Record actual results from the prior week
- Compare actual vs. forecast and identify where you were off
- Roll the forecast forward (drop week 1, add week 14)
- Adjust future weeks based on new information
Warning Signs to Watch
Your forecast should alert you to:
- Any week where ending cash drops below your minimum threshold
- Consecutive weeks of declining cash
- Large single-week outflows that need advance planning
- Seasonal patterns that require building reserves
Set a minimum cash threshold (often 2-4 weeks of operating expenses) and highlight any week that falls below it.
The Payoff
A well-maintained 13-week forecast provides:
- Early warning of cash shortfalls (weeks in advance, not days)
- Time to arrange financing before you desperately need it
- Confidence to make investment decisions
- Better vendor relationships (you pay on time, consistently)
- Reduced stress during tight periods
The few hours per week required to maintain this forecast pay dividends many times over.
