Profit and cash are not the same thing. A business can be profitable on paper and still struggle to pay its bills if customers pay late or a big expense lands at the wrong time. A simple cash flow forecast helps you see those moments coming.
Why 13 weeks?
A 13-week forecast covers a full quarter in enough detail to be useful. It’s short enough to be accurate and long enough to give you time to act, whether that means chasing payments, delaying a purchase or arranging financing.
What to include
- Opening cash: how much is in the bank at the start of each week.
- Money coming in: customer payments, based on when they actually pay, not when you invoice.
- Money going out: payroll, rent, suppliers, loan payments, taxes and any large one-off costs.
- Closing cash: opening cash plus money in, minus money out.
Be realistic about timing
The most common mistake is assuming customers pay on time. Look at how long your customers have actually taken to pay over the last few months and use that in your forecast. It’s better to be pleasantly surprised than caught short.
Update it every week
A forecast is only useful if it’s current. Once a week, replace last week’s estimates with actual figures and roll the forecast forward by one week. This takes 20 to 30 minutes once the template is set up.
The goal isn’t a perfect forecast. It’s no surprises.
Act on what you see
If the forecast shows a dip below your comfort level, you have options: chase overdue invoices, offer a small discount for early payment, agree new terms with suppliers, or delay non-essential spending. The earlier you see the dip, the more options you have.
Keep it simple
You don’t need special software to start. A well-organised spreadsheet works well for most growing businesses. What matters most is the habit of updating it every week.
