A 13-week cash forecast you can build in one afternoon

Profit and cash are different things, and the gap between them is where most small businesses get into trouble. A profitable quarter can still end with a payroll run you cannot cover, because the profit is sitting in accounts receivable and the payroll is due Friday.

The tool that fixes this is not complicated. It is a thirteen-week rolling forecast, it fits on one screen, and once it is built it takes about twenty minutes a week to maintain.

Why thirteen weeks

Thirteen weeks is one quarter. It is long enough to see a seasonal dip coming and short enough that your estimates are still credible. Beyond about four months, small-business cash forecasting turns into fiction.

The structure

Build a spreadsheet with thirteen columns, one per week, dated by week ending. Then four blocks of rows:

• Opening cash. The actual balance across every operating account on Monday morning.
• Cash in. Customer receipts by expected date, not invoice date. Loan draws. Owner contributions. Tax refunds.
• Cash out. Payroll, payroll taxes, rent, loan payments, card payments, vendor payments, subscriptions, insurance, estimated taxes.
• Closing cash. Opening plus in, minus out. This becomes next week's opening figure.

The three rows people forget

1. Payroll taxes as a separate line

Gross payroll and payroll tax deposits often leave the bank on different days, sometimes in different weeks. Combining them into one number is the single most common reason a forecast is wrong by exactly the amount you can least afford.

2. The fifth Friday

Bi-weekly payroll means two months a year have three pay runs instead of two. Owners plan for twenty-four cycles and get hit with twenty-six. Mark those weeks on the forecast now.

3. Annual and quarterly items

Insurance renewals, franchise fees, business licence renewals, quarterly estimated tax payments, software billed yearly. None of these appear in a typical month, all of them are real, and each one lands like a small crisis if it is not on the sheet.

Being honest about receipts

The temptation is to forecast customer payments on their due date. Do not. Use the date the customer has actually paid historically. If a client has paid on day forty-five for two years, forecast day forty-five, no matter what the invoice says. A forecast built on hope is worse than no forecast, because it feels like control.

Maintaining it

Every Monday, drop the completed week off the front and add a new week to the back. Replace last week's estimates with the actual figures and look at the variance. After about six weeks you will know exactly which of your own estimates to distrust, and the forecast becomes genuinely predictive.

What to do with the answer

If the closing balance in any week goes below your comfort floor — we suggest two payroll runs plus one month of fixed costs — you now have weeks of warning rather than days. That is enough time to accelerate collections, push a discretionary payment, or draw on a line of credit at a sane interest rate instead of an emergency one.

Every Growth and Established client at Desert Ledger receives this forecast as part of the monthly reporting pack, updated weekly. If you would rather build your own, the structure above is all there is to it.

---

This article is general information for US small business owners and is not tax, legal or accounting advice. Desert Ledger Bookkeeping is not a CPA firm. Speak to a licensed preparer about your own situation.

← Back to all insights