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A 13-week cash flow forecast is a week-by-week projection of the cash coming into and going out of your business for the next quarter. To build one, set up 13 weekly columns in a spreadsheet, enter today's bank balance as the opening cash, list the money you expect to receive and the week you expect it, list every payment going out and the week it leaves, then work out each week's closing balance, which becomes the next week's opening balance. Mark the weeks where cash drops below what you need to stay safe. Each week, replace the week that has passed with actual figures and add a new week 13, so the forecast always looks a full quarter ahead. The worked example below shows how a single late payment turns a comfortable quarter into a tight one.
A profit and loss statement tells you whether the last month made money. It cannot tell you whether you can pay the tax bill in week 10. A 13-week cash flow forecast can, because it tracks cash rather than profit, one week at a time, far enough ahead to do something about a problem before it arrives.
Thirteen weeks is one quarter: long enough to see a quarterly tax payment, an annual subscription or a slow-paying client coming, and short enough that your estimates are still worth something. This guide walks through building one in a spreadsheet, a full worked example, how to keep it rolling, and what goes wrong.
How to Build a 13-Week Cash Flow Forecast
- Set up the sheet. In Excel or Google Sheets, put the weeks across the top as 13 columns, each labelled with the date the week starts. Down the side, add rows for opening cash, each type of cash coming in, each type of cash going out, net cash flow and closing cash.
- Enter today's opening cash. Use the actual balance in your business bank account today, not the figure in your accounting software if the two differ. Everything else in the forecast builds on this number, so it has to be real.
- List the cash coming in, in the week it will actually arrive. Invoices already sent, retainers, deposits, anything you are confident of. Put each one in the week you expect the money in your account, not the week you sent the invoice. A client on 30-day terms who usually pays late belongs in the week they usually pay.
- List the cash going out, in the week it will leave. Regular running costs, what you pay yourself, contractors, loan repayments, annual subscriptions and insurance, and tax payments. The large, irregular items are the reason to forecast at all, so check last year's bank statements for anything that only appears once or twice a year.
- Calculate net cash flow and closing cash for each week. Net cash flow is cash in minus cash out. Closing cash is opening cash plus net cash flow. Each week's closing cash becomes the next week's opening cash.
- Set a safety line and mark the weeks below it. Choose the lowest balance you are comfortable holding, for example one month of essential costs, and highlight any week that falls under it. Those weeks are what the forecast is for.
- Update it every week. Replace the week that has just ended with what actually happened, adjust anything that has moved, and add a new week at the end so you always see 13 weeks ahead.
Aziz's take: Put money in the week it reaches your bank, not the week you earned it. Most forecasts that look fine and then go wrong were built from invoice dates. If you only change one habit, change that one: a forecast of when clients usually pay is more useful than a perfect forecast of when they should.
A Worked Example: 13 Weeks, Week by Week
The business below is a one-person consultancy. The figures are illustrative, chosen so the arithmetic is easy to follow. It starts the quarter with $9,000 in the bank and spends $250 a week on running costs such as software and phone. The owner draws $3,000 in weeks 4, 8 and 12, an annual insurance premium of $1,200 is due in week 6, a contractor is paid $1,500 in week 7, and a quarterly tax payment of $3,500 falls in week 10. Client payments arrive in weeks 1, 3, 5, 8, 9, 11 and 13.
| Week | Opening cash | Cash in | Cash out | Net | Closing cash |
|---|---|---|---|---|---|
| 1 | $9,000 | $2,500 | $250 | +$2,250 | $11,250 |
| 2 | $11,250 | $0 | $250 | −$250 | $11,000 |
| 3 | $11,000 | $4,000 | $250 | +$3,750 | $14,750 |
| 4 | $14,750 | $0 | $3,250 | −$3,250 | $11,500 |
| 5 | $11,500 | $2,500 | $250 | +$2,250 | $13,750 |
| 6 | $13,750 | $0 | $1,450 | −$1,450 | $12,300 |
| 7 | $12,300 | $0 | $1,750 | −$1,750 | $10,550 |
| 8 | $10,550 | $3,500 | $3,250 | +$250 | $10,800 |
| 9 | $10,800 | $2,500 | $250 | +$2,250 | $13,050 |
| 10 | $13,050 | $0 | $3,750 | −$3,750 | $9,300 |
| 11 | $9,300 | $2,000 | $250 | +$1,750 | $11,050 |
| 12 | $11,050 | $0 | $3,250 | −$3,250 | $7,800 |
| 13 | $7,800 | $2,500 | $250 | +$2,250 | $10,050 |
Read across the quarter and it looks comfortable: $19,500 comes in, $18,450 goes out, and the business ends $1,050 ahead. The lowest point is week 12, at $7,800, after the third owner's draw.
Now suppose the $3,500 project payment due in week 8 arrives four weeks late, in week 12. Every closing balance from week 8 to week 11 falls by $3,500, and week 10, the week the tax payment goes out, drops from $9,300 to $5,800. If the owner's safety line is one month of essential costs, about $4,000 here ($1,000 of running costs plus the $3,000 draw), that is close. Seen in week 1, it is a phone call to the client or a smaller draw in week 8. Seen in week 10, it is a scramble.
How to Make It a Rolling Forecast
A rolling forecast always covers the same distance ahead. Each week, the week that has just finished drops off the front, its estimates are replaced by what actually happened, and a new week is added at the end, so you are always looking 13 weeks forward rather than counting down to the end of a quarter.
Comparing each week's actual figures with what you forecast is also the most useful weekly cash flow report a small business can have: it shows which clients pay when they say they will, which costs creep up, and how accurate your estimates are. After a few weeks the forecast gets noticeably better, because you are correcting it with real numbers every week.
Aziz's take: The weekly update matters more than the first version. A forecast you built once and never touched is a guess with formatting. Fifteen minutes every Monday, replacing last week's estimates with what really happened, is what turns it into something you can make decisions on.
What Goes Wrong
- Forecasting invoices instead of payments. The forecast fills up with money that has been billed but not received. Use the week the cash actually lands.
- Forgetting the irregular costs. Annual renewals, insurance and tax payments are exactly what a 13-week view is meant to catch. Check last year's bank statements for them.
- Starting from the wrong balance. Use the real bank balance on the day you build it. A wrong opening figure makes every week after it wrong.
- Building it once and stopping. Without the weekly update it drifts away from reality within a month.
- Treating every incoming payment as certain. If a client is often late, forecast them late. Test what happens if your biggest expected payment slips, as in the example above.
For the bigger picture of keeping cash healthy, cash flow management for a small business covers the levers to pull once the forecast shows a problem, and tying client payments to payment milestones is one of the most direct ways to bring cash in earlier.