How to build a 13-week cash flow forecast

2 min read

Step 1Opening bank balance

Step 2Receipts and payments by week

Step 3Roll forward weekly

Number of lean months per year

Average monthly shortfall in lean months (£)

Unavoidable monthly fixed costs (£)

Sizes the working-capital buffer a seasonal business needs to cover its lean period.

Step 1 — set up the grid

Open a spreadsheet with 13 columns, one per week, and rows for receipts, payments and the running balance. Put your current bank balance in the opening cell. The structure is deliberately simple: everything that comes in, everything that goes out, and the balance that results, week by week. If you would rather not build it yourself, the cash flow forecast calculator does the arithmetic for you.

Step 2 — forecast receipts by when cash lands

List expected customer receipts in the week you actually expect the money, not the week you invoiced. Be honest about your debtor days: if a customer reliably pays in 45 days, place their receipt in week seven, not week five. Add any other inflows — grants, refunds, VAT reclaims. The discipline here is timing over optimism; a receipt in the wrong week makes the whole forecast lie.

Step 3 — forecast every payment

List every payment by its due week: wages, PAYE by the 22nd, VAT a month and seven days after quarter-end, rent, supplier invoices on their terms, loan repayments, insurance. Include the irregular ones people forget — the annual software renewal, the quarterly rates. Fixed-date obligations like tax are the easy part; the skill is remembering the lumpy, occasional payments that ambush an unprepared forecast. See planning around VAT and tax.

Step 4 — read the running balance

Each week's closing balance is the opening balance plus receipts minus payments, carried into the next week. Now scan the balance row: any week that dips negative is a shortfall you can now see coming. The whole value of the exercise is in that row — it turns a vague worry into a specific week and a specific number you can plan around.

Step 5 — roll it forward every week

Once a week, replace the past week's forecast with what actually happened, add a new week 13 on the end, and adjust the weeks between for anything you have learned. This keeps the forecast honest and always looking a full quarter ahead. Where a dip appears, act early — chase a receivable, defer a discretionary spend, or arrange a facility before you need it.

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Frequently asked questions

How long does it take to build?

An afternoon to set up the first version, then a few minutes each week to roll it forward. The ongoing discipline is small; the value is high because it turns cash worries into specific, actionable numbers.

Should I forecast receipts by invoice date or payment date?

Payment date — when you actually expect the cash to land, based on your real debtor days. Forecasting by invoice date overstates near-term cash and makes the whole forecast misleading.

What do I do when a shortfall appears?

Act early while options are cheap: chase a large receivable, defer discretionary spending, or arrange a short facility before you're in the red. The forecast's whole point is giving you that lead time.