A 13-week cash-flow forecast that you will actually use

Business & Outsourced Finance

A 13-week cash-flow forecast estimates money received and paid each week over roughly three months. It helps an owner see a potential shortfall early enough to respond. It complements a longer-term budget; it does not replace one.

The best version is one someone in the business will keep current. It does not need dozens of tabs. It does need honest assumptions about when customers will pay and what the business has already committed to spend.

Begin with the bank, then work forward

Use a reconciled opening cash balance. List expected receipts and payments by week, then calculate the closing balance. Carry that closing balance into the following week.

The business.gov.au cash-flow template and guidance explain this structure and the importance of identifying estimates and treating GST consistently. Our suggested weekly approach applies those principles to the near-term decisions facing an owner.

Keep available borrowing facilities separate from cash already in the bank. Check limits, expiry dates and conditions before treating an undrawn facility as reliable headroom.

Forecast collections, not just invoices

A sale recorded this week does not mean cash arrives this week. Review outstanding invoices with the people who know the customers. Flag disputed invoices and avoid giving uncertain receipts the same confidence as an agreed payment.

For a consulting firm, one delayed milestone payment can move a comfortable week into a tight one. For a wholesaler, larger orders may require stock purchases well before customers pay. The forecast should reflect how the particular business operates.

Put the awkward payments in early

Include wages, superannuation, tax commitments, rent, supplier payments, loan principal and interest, equipment deposits and planned owner drawings. Use the applicable payment dates and current advice for your business. Do not smooth large commitments evenly across the period just because that makes the chart look calmer.

Check for items outside the normal profit-and-loss report. A loan principal payment uses cash even though it is not an operating expense. A deposit may leave the bank long before the related purchase appears in monthly performance reporting.

Test a delay you could realistically face

Build one workable base case and one credible downside. You might move a major receipt back two weeks, reduce a forecast sales conversion or bring forward a necessary repair. Change assumptions that matter to this business.

For illustration, opening cash of $120,000 plus $80,000 in receipts less $150,000 in payments leaves $50,000. If $40,000 of those receipts arrives a week late, the closing balance falls to $10,000. The total month’s revenue may be unchanged, but the immediate decision is different.

Agree what happens if the balance approaches your minimum buffer. That could mean earlier collection discussions, revisiting discretionary spending or speaking with an adviser about funding. A forecast should not be used to justify delaying statutory obligations.

Make review part of the week

Replace last week’s estimates with actual cash movements, explain material differences and add another week at the end. Assign an owner to each action, such as resolving a disputed invoice or confirming a supplier payment schedule.

Why 13 weeks? It is a practical planning window that is long enough to expose near-term commitments while keeping weekly assumptions reasonably specific. It is not a legal requirement or a universal optimum.

What if the forecast shows the business cannot meet its debts? Seek accounting and legal advice promptly. A spreadsheet is an early-warning tool, not a substitute for advice on solvency and directors’ obligations.

Speak with our team

For help with your business, speak with David Rosenthal or Dion Spice. Explore our outsourced finance and CFO support and business advisory services.

General information only. Seek professional advice on your circumstances before making financial or business decisions.