Cash flow forecast: 13-week template, steps and worked example

A cash flow forecast estimates the cash coming into and going out of your business week by week, so you can see the lowest balance ahead before you reach it. For each week, closing balance = opening balance + expected receipts − expected payments, and that closing balance becomes the next week's opening balance.

This guide shows how to build a rolling 13-week forecast in six steps, with a worked example, a cautious scenario and the actions to take when the numbers show a gap.

Why forecast 13 weeks ahead?

Thirteen weeks is one quarter (52 ÷ 4), shown week by week. That is long enough to see a problem coming and short enough to forecast from facts you already know: open invoices, supplier bills, payroll, rent, loan instalments and tax dates.

Weekly detail matters because cash problems are about timing. A month can look fine in total while the week with payroll, rent and a tax payment goes below zero. The forecast is also rolling: every week you drop the week that has passed and add a new one at the end, so you always look a full quarter ahead.

A 12-month forecast answers a different question. It works by month, rests on assumptions about sales and costs, and helps you plan hiring, investments, financing and seasonal swings. Most businesses benefit from both.

How to build a cash flow forecast in six steps

1. 1Start from today's real balance. Add up what is actually in every business bank account and cash box today, not what the books say. If the two differ, do a bank reconciliation first.
2. 2List receipts by the date clients actually pay, not the invoice date. Place every open invoice in the week you expect the money, based on that client's real payment behaviour: if a client with 30-day terms usually pays after 45 days, plan for 45. Add new sales only when they are signed or very likely.
3. 3List every payment by its due date. Payroll and payroll taxes, rent, supplier invoices, loan repayments, VAT or sales tax, income tax payments, insurance, subscriptions, and annual bills such as licences or maintenance contracts. Tax dates and instalment rules differ by country, so check them with your accountant.
4. 4Calculate the net flow and closing balance for each week. Net flow = receipts − payments. Closing balance = opening balance + net flow, and it becomes the opening balance of the following week.
5. 5Set a minimum cash buffer. Choose the lowest balance you are willing to accept, for example one payroll or two to four weeks of fixed payments, and mark every week that falls below it.
6. 6Update every week and compare forecast with actual. Replace the week that has passed with real figures, add a new week at the end, and note why receipts or payments differed. Over time this shows which clients and costs you misjudge.

A simple template layout

Put the 13 weeks in columns and these rows underneath each other. A spreadsheet is enough to start.

Worked example: the first six weeks

A small service company starts with €17,500 in the bank and sets a minimum buffer of €12,000, roughly one month's payroll. Its biggest client is due to pay €10,400 in week 2.

• Week 3 carries payroll (€12,600), rent (€2,800) and suppliers (€2,500).
• Week 4 carries a VAT payment (€6,400), suppliers (€3,900) and a loan repayment (€1,300).
• Week 6 includes the annual insurance premium (€3,100) and suppliers (€4,800).

The bank balance never goes negative, but in week 4 it falls €2,400 below the buffer, something a month-by-month view would hide. In this base case, one call fixes it: ask the supplier you are due to pay in week 4 to accept the €3,900 a week later. Week 4 then closes at €13,500, and week 5 still ends at €16,500.

Scenario: what if the biggest client pays three weeks late?

A forecast is more useful with a cautious version next to the base case. Here the €10,400 from the biggest client arrives in week 5 instead of week 2.

In the cautious case, only €5,900 would remain after payroll in week 3, and the account would be overdrawn in week 4. Moving the supplier payment is no longer enough (week 4 would close at €3,100), so you would also remind the client before the due date, ask for a part payment, and arrange a credit line now, while the figures still look healthy.

What to do when the forecast shows a cash gap

The earlier you see a gap, the more options you have. Start with the actions that cost nothing:

• Chase overdue invoices. Contact every client past the due date, largest amounts first, and send automatic reminders so nothing slips. Our guide on how to get paid faster covers payment terms, reminders and email templates.
• Ask for deposits or stage payments on large orders and long projects, so cash comes in before you pay for materials and labour.
• Negotiate supplier terms. Ask to move a payment by a week or two, or for longer terms on the next order. Ask before the due date, not after it.
• Delay purchases and investments that can wait, such as new equipment or stock you will not sell in the coming weeks.
• Arrange a credit line early. Lenders are more willing when your numbers look healthy, so agree an overdraft or credit line months before you might need it.

Cash flow vs profit

Profit tells you whether the business earns money over a period. Cash flow tells you whether there is money in the bank on the day a bill is due. A profitable company can still run out of cash, for example when it invoices €20,000 in March on 60-day terms but pays its staff and suppliers in March and April.

Cash flow KPIs: DSO, DPO and cash runway

Three ratios show whether your cash position is likely to improve or get worse:

In the example, clients pay after 35 days on average while suppliers are paid after 30, so the business waits about five days longer for its money than its suppliers wait for theirs. Every day you take off DSO brings cash in sooner: with €108,000 of credit sales per quarter, one day is worth €1,200 (108,000 ÷ 90). Some businesses calculate DPO with cost of sales instead of purchases; whichever you choose, use it consistently.

Cash runway matters when more money leaves than comes in, for example in a slow season or while a new business is growing. It tells you how many months you have to change something before the cash runs out.

Common mistakes

1. 1Using invoice dates instead of payment dates. An invoice issued on the 1st with 30-day terms is not cash on the 1st, and often not on the 31st either.
2. 2Forgetting tax payments and annual bills. VAT or sales tax, income tax payments, insurance premiums and yearly licences are large and easy to miss because they do not come every month.
3. 3Never updating the forecast. A forecast built once is out of date within weeks. Update it on the same day every week.
4. 4Mixing personal and business accounts. Private spending from the business account, or business costs paid privately, distort both the opening balance and the pattern of payments.
5. 5Ignoring the timing of payroll. Salaries, payroll taxes and contributions leave on fixed dates, often in the same week as rent, and that week usually sets your lowest balance.

How Clientlly helps

Clientlly keeps the figures your forecast starts from in one place. Invoices carry due dates with an overdue workflow, and automatic payment reminders go out 3, 14 and 30 days after the due date. The payment register, with filtering and reporting, shows what clients paid and when, while supplier payments and expenses with approval, budgets and budget tracking show what goes out. Bank and cash accounts, bank transactions, bank connections with supported banks, CSV import, cash requests and transfers between bank and cash give you today's real balance, and reports export to PDF and Excel for your forecast. See the payments, expenses and treasury module.