A 13-week cash flow forecast: the simplest way to see trouble early
Profit tells you how the business did. A rolling 13-week cash forecast tells you whether you can pay next month’s bills, and gives you time to act.
A 13-week forecast looks a quarter ahead, week by week: cash in from customers, cash out to suppliers, staff, HMRC and lenders, and the balance at the end of each week. Updated every Friday with what actually happened, it becomes the most useful page in the business.
Week 7: quarterly VAT. Week 11: rent and payroll in the same week.
Show the data
| Wk 1 | £62,000 |
|---|---|
| Wk 2 | £58,000 |
| Wk 3 | £64,000 |
| Wk 4 | £57,000 |
| Wk 5 | £49,000 |
| Wk 6 | £53,000 |
| Wk 7 | £31,000 |
| Wk 8 | £36,000 |
| Wk 9 | £42,000 |
| Wk 10 | £38,000 |
| Wk 11 | £27,000 |
| Wk 12 | £34,000 |
| Wk 13 | £41,000 |
What it shows that the accounts do not
Quarterly VAT, rent and payroll can fall in the same week. A business that is profitable over the year can still run short for a fortnight. Seeing that dip ten weeks out leaves room to chase debtors, move a payment or arrange a facility on good terms, rather than in a hurry.
Keeping it useful
- Start from the real bank balance, not the accounts.
- Forecast receipts by customer and by expected payment date, not invoice date.
- Set a minimum balance you never plan to go below.
- Compare each week’s forecast with what happened, and learn from the gap.
More on
This insight is general information, not advice for your circumstances. Talk to us before acting on it.