A 13-week cash flow forecast shows the money expected into and out of your bank accounts each week, with the closing balance carried into the next week. It helps management see when cash could become tight and assign actions before a payment deadline arrives.
Start with cash dates, not accounting revenue
The British Business Bank’s cash forecasting guidance emphasises the timing of money reaching and leaving the bank. An invoice raised this week may be collected next month; buying equipment may use cash immediately even though the accounting expense is spread over time.
Begin with reconciled bank balances and identify restrictions. Do not count restricted cash as freely available. Show overdraft or other facility capacity separately, subject to availability and conditions, rather than treating an unapproved loan as cash already received.
Receipts
Use invoice ageing, collection conversations, customer terms and realistic sales assumptions. Separate committed receipts from uncertain pipeline.
Payments
Schedule payroll, supplier commitments, rent, tax, debt service, capital expenditure and other cash movements on the expected payment dates.
Control
Record the owner, evidence and last update for material assumptions. Separate cash timing from accounting recognition.
A full 13-week forecast for an illustrative UK SME
All figures below are fictional and shown in £000. Opening cash is £80,000. Receipts and payments represent bank movements, including any applicable tax cash flows. Payments are aggregated to keep the example readable; an operating workbook should split the important categories.
Closing cash = opening cash + receipts − payments
Week 1: £80,000 + £44,000 − £50,000 = £74,000.
Week 2 starts with that £74,000 closing balance.
| Week | Opening | Receipts | Payments | Closing | Delayed receipt case |
|---|---|---|---|---|---|
| 1 | 80 | 44 | 50 | 74 | 74 |
| 2 | 74 | 48 | 51 | 71 | 71 |
| 3 | 71 | 42 | 64 | 49 | 49 |
| 4 | 49 | 52 | 49 | 52 | 52 |
| 5 | 52 | 45 | 52 | 45 | 45 |
| 6 | 45 | 55 | 66 | 34 | 34 |
| 7 | 34 | 48 | 50 | 32 | 2 |
| 8 | 32 | 57 | 53 | 36 | 6 |
| 9 | 36 | 50 | 65 | 21 | -9 |
| 10 | 21 | 58 | 52 | 27 | 27 |
| 11 | 27 | 52 | 54 | 25 | 25 |
| 12 | 25 | 60 | 68 | 17 | 17 |
| 13 | 17 | 55 | 53 | 19 | 19 |
The base case ends with £19,000, but the lowest weekly closing balance is £17,000 in week 12. Looking only at the end of the quarter would miss the tighter earlier position. Weekly closing balances can also hide a shortfall within a week, so examine daily timing around large payments when needed.
What if a £30,000 receipt arrives three weeks late?
In the delayed receipt case, move £30,000 of week 7 collections to week 10. Do not remove the receipt entirely: this scenario tests timing, not a permanent loss. Keep every other assumption unchanged.
Closing cash falls to £2,000 in week 7, £6,000 in week 8 and negative £9,000 in week 9. It recovers to £27,000 in week 10 when the delayed receipt arrives. Both cases still end at £19,000. Identical end balances can therefore conceal very different funding needs.
The negative balance represents an unfunded gap under the stated assumptions, not an automatic permission to overdraw. A real business needs to assess available funding, restrictions and obligations before relying on a response.
Use a buffer to make the decision visible
Suppose management chooses an illustrative £20,000 minimum cash buffer. The base case’s lowest balance is £3,000 below that buffer. The delayed receipt case is £29,000 below it. These are gaps to the chosen buffer, not necessarily the amount of a loan required. Actual funding need also depends on timing within the week, contingencies and the availability of facilities.
Turn the forecast into actions with owners
| Issue | Action to investigate | Owner and evidence |
|---|---|---|
| Receipt concentrated in week 7 | Confirm customer approval, invoice status and expected payment date. | Sales or credit-control owner; dated customer evidence. |
| Large committed payments | Review timing and obligations; seek agreement before changing terms. | Operations and finance; contract and supplier confirmation. |
| Cash gap in downside case | Assess realistic funding options and the lead time for approval. | Finance lead; facility terms, conditions and funding timetable. |
| Little margin for error | Review discretionary spending and assumptions without hiding committed costs. | Management; approved decisions and revised forecast. |
A forecast does not itself resolve a shortfall. Record who will act, by when, and what evidence would justify changing the assumption. Avoid presenting a proposed funding application as an approved receipt.
Run a weekly forecast-to-actual review
- Close the completed week. Reconcile actual bank movements and the closing balance.
- Explain the differences. Separate timing changes, permanent movements and errors.
- Update the remaining weeks. Move delayed receipts and payments once; do not duplicate them.
- Add a new week. Keep the rolling horizon at 13 weeks.
- Review the lowest cash point. Check both the base case and relevant downside cases.
- Track actions. Record owners, dates and unresolved assumptions.
When do you need a longer financial model?
A weekly forecast is useful for near-term cash control. It does not replace a connected profit and loss, balance sheet and cash flow model for longer-term growth, financing, investment or acquisition decisions. Use financial modelling to connect operating assumptions to those outcomes.
For a quick exploration, the cash runway stress test can help you consider a simplified downside. It is a separate assessment tool, not a substitute for a reconciled weekly forecast.
Frequently asked questions
Is a 13-week cash forecast the same as a budget?
No. A near-term cash forecast schedules receipts and payments by expected bank date. A budget may measure revenue and expenses on an accounting basis and cover a longer period.
Should receipts and payments include VAT?
Use the actual expected bank amounts consistently. Where applicable, customer receipts and supplier payments include VAT, with VAT settlements or refunds scheduled separately. Reconcile the approach to avoid omitting or double-counting VAT.
What does a negative closing cash balance mean?
It shows an unfunded gap under the forecast assumptions unless a separately identified and available facility covers it. It is a signal to investigate timing, actions and realistic funding rather than assume borrowing is approved.
Why can two scenarios end with the same cash but have different risks?
A delayed receipt can create an earlier shortfall even if it arrives before the forecast ends. Review the lowest cash point and important daily movements, not just the final balance.
How often should the forecast be updated?
A rolling weekly process is useful for this format: replace the completed week with actuals, explain variances, update assumptions and add a new week. More frequent review may be needed around critical cash dates.
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Over 12 years across Big Four audit, Investment Banking, and corporate advisory. Kish works with SaaS founders, tech companies, and ambitious UK SMEs from £1M to £50M in revenue on fundraising, valuations, exit planning, and financial strategy. ICAEW regulated. Big Four trained. Based in London.