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Building a 13-week cashflow forecast: a director’s working tool
Most companies that get into difficulty do not fail because they are unprofitable. They fail because, on a particular Friday, there is not enough cash in the account to meet the payroll or the VAT bill — even though the business is doing well on paper. Profit is an accounting view; cash is the thing that actually pays wages and suppliers. The single most useful tool for staying on top of the difference is a 13-week rolling cashflow forecast: a simple, week-by-week projection of the money coming in and going out over the next quarter. This piece explains what it is, how to build one, and how to use it to see problems — and opportunities — before they arrive.
Why 13 weeks, and why weekly
Thirteen weeks is one quarter — long enough to see the big commitments coming (a quarterly VAT payment, a rent day, a large supplier settlement) but short enough that your estimates are grounded in real, known figures rather than guesswork. Weekly granularity matters because cash problems are almost always about timing within a month, not the month as a whole: a company can be comfortably cash-positive across a month yet run dry in week two because a big payment lands before the money that funds it arrives. A monthly view hides that trough; a weekly view shows it.
What goes in it: the rows that matter
A forecast is just a grid: thirteen columns, one per week, and a handful of rows. You do not need accounting software to start — a spreadsheet is enough. The rows fall into three blocks.
- Opening cash. The bank balance at the start of the week. Week one is today’s actual balance; every later week carries forward the closing balance from the week before.
- Cash in. Money you expect to actually receive that week — not invoices raised, but cash landing. Time it to when customers really pay, using their normal payment behaviour, not the theoretical due date. Split out anything lumpy or uncertain so you can flex it.
- Cash out. Everything leaving the account: payroll, PAYE and pension, rent, suppliers, loan repayments, VAT and corporation tax, subscriptions, the small recurring costs that add up. Put the fixed, certain commitments in first — those are the ones you cannot miss.
- Closing cash. Opening + cash in − cash out. This becomes next week’s opening balance, and it is the number you watch: the lowest closing balance across the thirteen weeks is your tightest point.
The number to watch: the low point
Read the closing-cash row across all thirteen weeks and find the lowest figure. That trough — not the average, not the total — is what the forecast is for. If the low point is comfortably positive, you have headroom. If it dips towards zero, or below, you have found a funding gap before it becomes a crisis, with weeks of notice to do something about it. That is the whole value of the exercise: it converts a vague worry into a dated, sized number you can act on. The way a company’s trade shapes where that trough falls is the subject of the cashflow gap, by industry.
Making it rolling: update every week
A forecast is not a document you build once and file. Its power comes from being rolling: each week you drop the week just gone, add a new week thirteen out, and — crucially — replace your estimates with what actually happened. Doing this teaches you fast how accurate your assumptions were, and your forecast gets sharper every week. Ten minutes each Monday keeps it live. A forecast that is a fortnight stale is worse than none, because it gives false confidence.
What to do when the trough goes red
A forecast is only useful if it drives action. When the low point turns negative, you have levers, roughly in order of preference:
- Pull cash in forward. Invoice sooner, chase overdue receipts, offer a small early-settlement discount, or ask for a deposit on large orders.
- Push non-critical spend back. Defer discretionary purchases past the trough; agree longer terms with suppliers where you can. Negotiating those terms is covered in negotiating supplier and customer payment terms.
- Talk to HMRC early about a Time to Pay arrangement if a tax bill is the pinch — see funding a VAT or tax bill.
- Bridge a genuine, short, self-liquidating gap with finance sized to the trough — not to a round number. A forecast tells you exactly how much and for how long, which is the difference between borrowing well and over-borrowing. Whether a bridge is even the right answer is set out in when not to borrow.
Why lenders like a company that forecasts
A director who can produce a clean 13-week forecast is signalling something a lender values: that they understand their own cash and are asking to borrow a specific amount for a specific, dated reason. It reframes a funding request from “we’re short” to “our week-seven trough is £X because a large receipt lands in week nine”. That is a fundable conversation. It also connects to how a lender tests the request in the first place — the logic in how a lender assesses affordability.
The honest summary
A 13-week rolling cashflow forecast is a spreadsheet with thirteen columns and four blocks of rows: opening cash, cash in, cash out, closing cash. Build it from known commitments first, time receipts to when customers really pay, and update it every week with actuals. The lowest closing balance is the number that matters — find it, and you find your funding gaps with weeks of warning. It is the cheapest, most powerful financial tool a director of an incorporated business can keep, and it makes every borrowing decision that follows a better one.