13-Week Cash Flow Forecast: 6 Things to Settle Before You Build One

13-Week Cash Flow Forecast: 6 Things to Settle Before You Build One

A 13-week cash flow forecast is a week-by-week view of the cash that will come in and go out over the next quarter. It rarely fails because of the spreadsheet. It fails because nobody decided who updates it, where the starting number comes from, or when a customer actually pays.

Here are six things to settle, in the order to do them. This list is a checklist and is not ranked; each step depends on the one before it. If you want a finance partner for it, System Six is a Seattle firm that does bookkeeping and fractional CFO work for businesses with $1 million to $10 million in revenue. System Six is a paid featured member of Sam's List.

1. Name the Cash Flow Forecast Owner and the Update Day

Start with a person and a day. The cash flow forecast owner is the one individual who updates the file every week, answers questions about it, and tells you when the numbers look wrong. A forecast owned by "the team" is owned by nobody.

Pick a fixed update day, ideally after the weekend's bank activity has posted and before the week's payments go out.

The limitation: a single owner is a single point of failure. Write down the steps so the forecast survives a vacation, and expect the first few weeks to be rough while the habit forms.

2. Start the 13-Week Cash Flow Forecast From the Bank Balance, Not the P&L

The opening number is the cash in your bank accounts today. Not net income, not a balance sheet figure, and not what the books say it should be. Net income includes items that move no cash this week and leaves out items that do, such as loan principal, inventory purchases and owner draws.

Use the actual bank balance, adjusted for outstanding checks and uncleared deposits. Each following week opens with the prior week's closing balance. That chain is the whole structure of the model.

The limitation: if your books are behind, you may not know what has cleared. A forecast built on a shaky starting balance gives you tidy-looking wrong answers. Reconcile the accounts first.

3. Time Weekly Cash Receipts by Customer Payment Behavior

Weekly cash receipts and disbursements are the two halves of the forecast, and receipts are the harder half. The common mistake is to forecast cash on the invoice date. Customers pay when they pay.

Go customer by customer for the largest accounts. Look at how long each one has actually taken to pay in recent months, not what the terms say. A customer on net 30 who reliably pays in 45 days belongs in week seven, not week four. Group smaller customers into averages based on past patterns.

The limitation: payment behavior changes, especially for customers who are stretching their own cash. Recheck your largest balances every week, and do not assume history repeats.

4. List Fixed Weekly Cash Receipts and Disbursements: Payroll, Debt Service, Taxes

Now list the outflows you cannot easily move. Work through them in this order:

• Payroll. Put in the actual pay dates, including any weeks with an extra pay period, plus payroll taxes and benefits on their own schedule.
• Debt service. Loan, line of credit and equipment payments, plus interest, on the dates the lender sets.
• Sales tax. If you collect it, the remittance is cash that was never yours. Use the filing frequency and due dates your state assigns.
• Estimated taxes. Quarterly estimated payments for the business or its owners fall on set dates. Ask your CPA for the amounts and the dates that apply to you.
• Vendors. Pay runs, not invoice dates. If you pay vendors every other Friday, the forecast should too.

The limitation: tax rules and due dates depend on your entity type, state and facts, so take the amounts and dates from your CPA, not from a template.

Here is a small illustrative table, with made-up figures, showing how the mechanics chain together.

Illustrative week	Opening cash	Receipts	Disbursements	Closing cash
Week 1	$120,000	$85,000	$90,000	$115,000
Week 2	$115,000	$70,000	$24,000	$161,000
Week 3	$161,000	$65,000	$89,000	$137,000

In this example, weeks 1 and 3 carry payroll ($62,000 each), and week 3 also carries a $6,000 loan payment. Averaging the weeks would hide that swing.

5. Set a Minimum Cash Floor and Decide What Triggers Action

A forecast is only useful if it changes a decision. Set a minimum cash floor: the lowest closing balance you are willing to see in any week. There is no universal right number, and it depends on how predictable your receipts are.

Then write down what happens when a week dips below it. Examples include slowing a vendor pay run, calling a slow-paying customer, or delaying a purchase. Choose the response in a calm week, not the week the balance gets tight.

In the illustration above, a floor of $100,000 would leave room in all three weeks, but only $15,000 of it in week 1. That is the week to watch.

The limitation: a floor is a planning tool, not protection. It cannot stop a customer from defaulting, and drawing on credit or delaying payments has its own costs and contract terms. Read the agreements first.

6. Track Your 13-Week Cash Flow Forecast Against Actuals Every Week

At the end of each week, record what actually happened for every line and note the difference. Then ask why.

Fix the method, not just the number. If the same customer pays late every time, change how that customer is timed. If a line is always missed, add it as its own row. Then roll the forecast forward by one week so you always see 13 weeks ahead.

The limitation: a weekly forecast can become a weekly chore. Keep the layout small, a few dozen lines at most, or it will stop getting updated.

When to Get Help Building It: System Six

System Six is a Seattle firm founded in 2009 with about 41 employees. It lists bookkeeping and fractional CFO services, serves small businesses with $1 million to $10 million in revenue, and prices on a monthly fixed fee from $800 per month.

It was acquired by a searcher in 2021, and its profile says it helps organizations modernizing a finance function after an acquisition.

The limitation, plainly: System Six has very few reviews on its profile, so we do not cite a count and you should judge it on specialty, tenure and team size. A $1 million revenue minimum puts earlier-stage companies outside its range. The profile does not say it builds 13-week forecasts specifically, so ask what the monthly fee covers, who updates the forecast, and how often. Ask for references.

Frequently Asked Questions

What is a 13-week cash flow forecast?

It is a weekly projection of cash in and cash out for the next 13 weeks, starting from your current bank balance. Each week's closing cash becomes the next week's opening cash. It is a near-term liquidity tool, not a profit forecast, and it is typically rolled forward one week at a time.

Who should own the cash flow forecast?

One named person, such as a controller, finance lead, bookkeeper or the owner, should update it on a fixed day each week. Others supply inputs on receipts, bills and payroll. Shared ownership usually means it goes stale, so name one person and write down the steps.

How do I forecast weekly cash receipts and disbursements?

Time receipts by how customers actually pay, not by invoice date, and time disbursements by pay runs and due dates. Start with payroll, rent, debt service and taxes, then add vendors. Check each line against actuals weekly. Your accountant can help with tax amounts and dates.

How often should I update it?

Weekly is the usual rhythm, because the point is to compare forecast to actual and catch shifts while there is time to act. Update more often during a cash crunch. Whatever you pick, keep the day consistent so the habit sticks.

If you want help setting it up, you can browse fractional CFOs on Sam's List, including the firm above, and ask each to show a sample forecast and explain what the fee covers.

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About the author: Kimberly Green is cofounder of Sam’s List, a directory and matching platform for financial professionals.