13-Week Cash Flow Forecast: A Practical Step-by-Step Guide

There is something about cash that improves everyone’s interest in Finance.

Revenue misses forecast? We should discuss it.

Gross margin moves? Let’s understand the drivers.

Cash gets tight?

Suddenly the CFO, CEO, Controller, three department heads and someone who hasn’t spoken to Finance since the Christmas party would like an update.

Preferably this afternoon.

That’s one reason I’ve always liked a 13-week cash flow forecast.

It isn’t particularly glamorous. Nobody is going to admire the formatting for very long. And if things get interesting enough, nobody cares what color the cells are anyway.

They want to know:

How much cash do we have, when is more coming in, and when are we going to need it?

That’s the job.

And when liquidity matters, there aren’t many FP&A tools I’d rather have.

What Is a 13-Week Cash Flow Forecast?

A 13-week cash flow forecast is a rolling weekly projection of the cash you expect to receive, the cash you expect to spend, and the resulting cash balance over roughly one quarter.

At its simplest:

Beginning cash

+ Cash receipts

− Cash disbursements

= Ending cash

Next week’s beginning balance is this week’s ending balance.

Repeat 13 times.

This is not advanced mathematics.

The interesting part is getting everyone to agree about when the money is actually showing up.

That’s where things get considerably more entertaining.

Thirteen weeks works well because it’s long enough to see trouble coming but short enough that you can get fairly specific about actual cash movements.

If I’m worried about payroll six weeks from now, telling me EBITDA should improve next year isn’t especially comforting.

Different question.

Different forecast.

Why 13 Weeks?

Thirteen weeks gives you roughly one quarter of visibility at a weekly level.

That weekly part matters.

A monthly cash forecast can tell me March looks perfectly healthy.

A weekly forecast can tell me March looks healthy because we nearly run out of cash on March 12 and a $900,000 customer payment supposedly arrives March 18.

I would like to discuss March 18.

Possibly at length.

A weekly forecast exposes the timing that monthly models can hide.

Payroll.

Customer collections.

Taxes.

Vendor payments.

Debt service.

Insurance.

Capital expenditures.

All the things that have an annoying tendency to occur on actual dates.

This makes the 13-week forecast especially useful when liquidity is tight, but I don’t think a company needs to be in distress to use one.

I’d much rather discover a cash problem while it’s still boring.

Boring problems are usually cheaper.

Start With the Bank Balance

The first number I want isn’t revenue.

It isn’t EBITDA.

It’s not the annual plan.

How much cash do we actually have?

Pull the current available balances for the bank accounts included in the forecast.

That’s our starting point.

Simple.

Except Finance can make even this interesting.

Which accounts are unrestricted?

Are there separate payroll accounts?

Are any funds restricted?

Are there outstanding checks?

Is there a revolver available?

Does the general ledger agree with what’s actually available at the bank?

Before I forecast cash, I want to understand what this company means when it says cash.

I have learned not to assume everyone in a meeting is using the same definition of anything.

Especially when there are dollar signs involved.

Step 1: Figure Out What’s Actually Coming In

For most businesses, customer collections are where this starts getting interesting.

Receipts might include:

• customer collections,
• cash sales,
• subscription payments,
• financing proceeds,
• tax refunds,
• asset sales,
• intercompany transfers,
• and other expected cash inflows.

But here’s where I become difficult.

I don’t want to take forecast revenue and call it cash.

Revenue and cash know each other.

They are not the same person.

If customers pay in 30, 45 or 60 days, I need to understand when those invoices are actually going to turn into money we can use.

So now I’m looking at AR aging.

Which invoices are outstanding?

Which customers pay on time?

Which ones consider Net 30 more of a creative suggestion?

Are there disputes?

Are invoices even out the door?

Has anyone spoken to the customer?

And if you tell me a $500,000 payment is arriving next Thursday, I am going to become extremely interested in how we know that.

“The customer usually pays around then” will not have the calming effect you hoped for.

This may be my natural pessimism finding another professional application.

But if payroll is Friday, I’m suddenly very curious about that customer’s habits.

Step 2: Figure Out What’s Going Out

Next comes the other side.

The money leaving.

Depending on the company, I usually want visibility into:

• payroll,
• benefits,
• vendor payments,
• rent,
• software,
• taxes,
• debt service,
• insurance,
• capital expenditures,
• commissions,
• contractors,
• professional fees,
• and other meaningful disbursements.

The categories should reflect the business.

The goal isn’t to reproduce the entire chart of accounts in another spreadsheet.

Please don’t.

The goal is to understand when cash leaves the bank.

Payroll is generally predictable.

Taxes tend to be lumpy.

Vendor payments require judgment.

Capital expenditures can create large movements.

And then there are annual payments.

Those are fun.

Somewhere in Week 8 you’ll discover a $140,000 insurance payment that apparently everyone knew about except the cash forecast.

This is why we ask questions.

Step 3: Stop Thinking Like the P&L

A cash forecast isn’t an income statement with different column headings.

An expense can be recognized today and paid later.

Revenue can be recognized before the customer pays.

Customers can pay before revenue is recognized.

Debt principal uses cash without appearing as an operating expense.

Depreciation is an expense that doesn’t require somebody to send a check.

CapEx can consume a great deal of cash while politely avoiding the income statement.

This is where people who live primarily in the P&L sometimes have to adjust their brains.

Cash doesn’t particularly care when Accounting recognizes something.

It cares when the bank account moves.

For 13 weeks, I want everyone thinking that way.

Step 4: Build the Weekly Model

The basic model doesn’t need to be complicated.

You can make this more sophisticated later.

I wouldn’t rush.

I want the first version to be understandable by someone other than the person who built it.

I’ve inherited enough financial models where touching one formula felt like defusing something.

Cash forecasting is not where I want that experience.

Step 5: Decide How Low Is Too Low

Knowing ending cash isn’t enough.

I also want to know:

At what point do we become uncomfortable?

The company may have a formal minimum liquidity requirement.

A debt agreement may create constraints.

Or management may establish an operating threshold based on payroll, vendor commitments and normal volatility.

Whatever the appropriate number is, make it visible.

Now the forecast becomes an early-warning system.

Maybe we’re fine today.

Maybe we’re fine next week.

But Week 9 shows cash dropping below the threshold.

Good.

Not good that we’re approaching it.

Good that we’re seeing it in Week 1.

We have eight weeks to be less surprised.

That is a much better position than discovering the problem in Week 8 and holding a meeting called Cash Update with 14 people invited.

Step 6: Build a Base Case You Actually Believe

This is where optimism can get expensive.

Your base case should represent what you currently believe is most likely to happen.

Not what you need to happen.

There’s a difference.

If a customer historically pays 15 days late, I’m not assuming they’ll suddenly discover punctuality because the cash forecast needs them on Thursday.

If financing isn’t committed, I don’t treat the proceeds like they’re already sitting at the bank.

If a large sale hasn’t closed, I’m not spending the customer’s money.

Put upside in an upside case.

The base case needs to survive a reasonably skeptical person asking:

Do we actually believe this?

I volunteer for that job quite often.

Step 7: Build Scenarios That Might Change a Decision

I don’t need 47 scenarios.

I’ve never seen a cash problem become easier because Finance created enough tabs to cover the entire bottom of Excel.

Give me the uncertainties that actually matter.

What happens if that large collection arrives two weeks late?

What if sales slow?

What if hiring happens faster?

What if a customer leaves?

What if the financing closes a month later?

What if a large vendor demands payment sooner?

Then comes the part I care about:

What are we going to do?

Delay hiring?

Push CapEx?

Reduce discretionary spending?

Accelerate collections?

Renegotiate payment terms?

Use available credit?

A downside scenario that ends with everyone saying, “Well, that would be bad,” hasn’t finished the assignment.

I already knew running out of cash would be bad.

I’m looking for the decision.

Step 8: Find Out Who Actually Knows

Finance may own the cash forecast.

Finance does not possess all the information required to build it.

That’s important.

Sales may know whether a large deal will close.

AR knows which customers are paying.

AP knows what’s coming due.

HR knows who’s being hired.

Operations knows what needs to be purchased.

Tax knows what’s owed.

Department leaders know what they’re about to spend.

And sometimes one person named Mike knows about a $200,000 payment nobody else seems to remember.

Find Mike.

The best cash forecasting processes create ownership around those inputs.

I want to know who stands behind the significant assumptions.

Otherwise Finance becomes the central repository for everybody else’s guesses.

Then our name is on the spreadsheet.

Convenient arrangement.

Step 9: Roll It Every Week

You don’t build a 13-week forecast and then spend the next 13 weeks watching to see whether you were right.

Each week:

Drop the completed week.

Replace forecast with actual activity.

Add another week to the end.

Update collections.

Update payments.

Move anything that changed.

Add new information.

Review the ending cash balance.

You’re always maintaining roughly 13 weeks of forward visibility.

And this is where the forecast starts getting interesting.

Because every week reality grades your assumptions.

No performance review required.

Step 10: Ask Why You Were Wrong

This might be my favorite part.

Compare forecast cash flows with actual cash flows.

Where did we miss?

Collections?

Vendor payments?

Payroll?

Taxes?

Timing?

Then don’t stop at:

We missed collections by $300,000.

Why?

Did a customer pay late?

Did we invoice late?

Was there a dispute?

Did Sales assume something Finance didn’t know?

Was our historical collection assumption wrong?

Did someone know the payment was moving and forget to mention it?

That last one is always enjoyable.

I don’t investigate misses because I expect the forecast to be perfect.

I investigate them because repeated misses usually tell you something about the business or the process.

Sometimes both.

The Weekly Cash Meeting Shouldn’t Become a Lifestyle

I like a short weekly cash review.

Short is important.

Thirty minutes is usually plenty if everyone comes prepared.

I want to know:

What moved?

What large receipts changed?

What large payments changed?

What’s new?

What’s uncertain?

Where is our lowest cash point?

Are we getting close to our minimum?

Do we need to do anything?

That’s it.

I don’t need a 42-slide deck about cash.

If liquidity is genuinely getting tight, the bank balance has already provided sufficient drama.

Common 13-Week Cash Flow Forecasting Mistakes

Treating AR Like Cash

An invoice is not money in the bank.

There are customers who have built entire personalities around demonstrating this distinction.

Starting With the P&L

The income statement answers a different question.

Forecast the timing of actual cash.

Giving Every Dollar the Same Attention

Materiality matters.

I don’t want Finance spending 45 minutes debating a $900 subscription payment while casually assuming a $750,000 customer receipt will arrive Friday.

One of these deserves more questions.

Being Too Optimistic About Collections

Expected cash and available cash are two different things.

The difference becomes increasingly interesting as your balance approaches zero.

Forgetting the Weird Stuff

Taxes.

Insurance.

Bonuses.

Debt payments.

CapEx.

Annual contracts.

The weird stuff becomes much less weird after it happens twice.

Never Comparing Forecast to Actual

Then the same assumptions can remain wrong indefinitely.

Very efficient.

Building Something Only One Person Understands

If the person maintaining your cash forecast can’t take a week off, you don’t have a process.

You have a hostage.

What I Start Noticing Once the Forecast Works

This is where the model becomes much more useful to me.

I’m no longer staring only at ending cash.

I’m watching behavior.

Are collections slowing?

Are customers stretching payment terms?

Are we hiring ahead of revenue?

Is inventory consuming more cash?

Are vendors asking for faster payment?

Is growth requiring more working capital than expected?

Are we consistently too optimistic about certain receipts?

Does our entire liquidity position depend on one customer paying on one particular Thursday?

That last one tends to get my attention.

A good 13-week cash forecast starts showing you how the business behaves.

Sometimes before the P&L makes the problem obvious.

That’s why I don’t think of this as just a treasury exercise.

It’s another way FP&A learns the business.

Do You Always Need a 13-Week Cash Flow Forecast?

No.

I’m suspicious of any finance person who thinks every company needs every finance process.

A business with substantial cash reserves, predictable collections and very stable spending may not need this level of weekly detail.

But I’d strongly consider a 13-week forecast when the company:

• has limited liquidity,
• is growing rapidly,
• has volatile collections,
• carries meaningful debt,
• has large working-capital swings,
• is restructuring,
• is preparing for financing,
• is going through an acquisition or integration,
• or simply doesn’t have enough visibility into short-term cash.

Build the process the business needs.

Not the one that looks most sophisticated.

The Spreadsheet Is the Easy Part

The mechanics of a 13-week cash flow forecast are pretty straightforward.

Beginning cash.

Money in.

Money out.

Ending cash.

Repeat.

I can teach someone the basic model fairly quickly.

What takes longer is getting good information into it.

Will the customer actually pay Thursday?

Is that hire really starting?

Is that purchase happening?

Is the financing actually closing?

Did anyone forget a tax payment?

Why did this move?

Who knows something Finance doesn’t know yet?

Those aren’t spreadsheet questions.

They’re business questions.

And that’s probably why I like the 13-week cash flow forecast so much.

It looks like a cash model.

But if you use it properly, it tells you quite a bit about the company.

How information travels.

How realistic people are.

How well departments communicate.

Whether assumptions have owners.

Whether bad news arrives early or waits until the bank account announces it.

Cash is wonderfully unforgiving that way.

It eventually settles the argument.

I’d just prefer FP&A know what it’s going to say a few weeks before everyone else does.

There is something about cash that improves everyone’s interest in Finance.

Revenue misses forecast? We should discuss it.

Gross margin moves? Let’s understand the drivers.

Cash gets tight?

Suddenly the CFO, CEO, Controller, three department heads and someone who hasn’t spoken to Finance since the Christmas party would like an update.

Preferably this afternoon.

That’s one reason I’ve always liked a 13-week cash flow forecast.

It isn’t particularly glamorous. Nobody is going to admire the formatting for very long. And if things get interesting enough, nobody cares what color the cells are anyway.

They want to know:

How much cash do we have, when is more coming in, and when are we going to need it?

That’s the job.

And when liquidity matters, there aren’t many FP&A tools I’d rather have.

What Is a 13-Week Cash Flow Forecast?

A 13-week cash flow forecast is a rolling weekly projection of the cash you expect to receive, the cash you expect to spend, and the resulting cash balance over roughly one quarter.

At its simplest:

Beginning cash

+ Cash receipts

− Cash disbursements

= Ending cash

Next week’s beginning balance is this week’s ending balance.

Repeat 13 times.

This is not advanced mathematics.

The interesting part is getting everyone to agree about when the money is actually showing up.

That’s where things get considerably more entertaining.

Thirteen weeks works well because it’s long enough to see trouble coming but short enough that you can get fairly specific about actual cash movements.

If I’m worried about payroll six weeks from now, telling me EBITDA should improve next year isn’t especially comforting.

Different question.

Different forecast.

Why 13 Weeks?

Thirteen weeks gives you roughly one quarter of visibility at a weekly level.

That weekly part matters.

A monthly cash forecast can tell me March looks perfectly healthy.

A weekly forecast can tell me March looks healthy because we nearly run out of cash on March 12 and a $900,000 customer payment supposedly arrives March 18.

I would like to discuss March 18.

Possibly at length.

A weekly forecast exposes the timing that monthly models can hide.

Payroll.

Customer collections.

Taxes.

Vendor payments.

Debt service.

Insurance.

Capital expenditures.

All the things that have an annoying tendency to occur on actual dates.

This makes the 13-week forecast especially useful when liquidity is tight, but I don’t think a company needs to be in distress to use one.

I’d much rather discover a cash problem while it’s still boring.

Boring problems are usually cheaper.

Start With the Bank Balance

The first number I want isn’t revenue.

It isn’t EBITDA.

It’s not the annual plan.

How much cash do we actually have?

Pull the current available balances for the bank accounts included in the forecast.

That’s our starting point.

Simple.

Except Finance can make even this interesting.

Which accounts are unrestricted?

Are there separate payroll accounts?

Are any funds restricted?

Are there outstanding checks?

Is there a revolver available?

Does the general ledger agree with what’s actually available at the bank?

Before I forecast cash, I want to understand what this company means when it says cash.

I have learned not to assume everyone in a meeting is using the same definition of anything.

Especially when there are dollar signs involved.

Step 1: Figure Out What’s Actually Coming In

For most businesses, customer collections are where this starts getting interesting.

Receipts might include:

• customer collections,
• cash sales,
• subscription payments,
• financing proceeds,
• tax refunds,
• asset sales,
• intercompany transfers,
• and other expected cash inflows.

But here’s where I become difficult.

I don’t want to take forecast revenue and call it cash.

Revenue and cash know each other.

They are not the same person.

If customers pay in 30, 45 or 60 days, I need to understand when those invoices are actually going to turn into money we can use.

So now I’m looking at AR aging.

Which invoices are outstanding?

Which customers pay on time?

Which ones consider Net 30 more of a creative suggestion?

Are there disputes?

Are invoices even out the door?

Has anyone spoken to the customer?

And if you tell me a $500,000 payment is arriving next Thursday, I am going to become extremely interested in how we know that.

“The customer usually pays around then” will not have the calming effect you hoped for.

This may be my natural pessimism finding another professional application.

But if payroll is Friday, I’m suddenly very curious about that customer’s habits.

Step 2: Figure Out What’s Going Out

Next comes the other side.

The money leaving.

Depending on the company, I usually want visibility into:

• payroll,
• benefits,
• vendor payments,
• rent,
• software,
• taxes,
• debt service,
• insurance,
• capital expenditures,
• commissions,
• contractors,
• professional fees,
• and other meaningful disbursements.

The categories should reflect the business.

The goal isn’t to reproduce the entire chart of accounts in another spreadsheet.

Please don’t.

The goal is to understand when cash leaves the bank.

Payroll is generally predictable.

Taxes tend to be lumpy.

Vendor payments require judgment.

Capital expenditures can create large movements.

And then there are annual payments.

Those are fun.

Somewhere in Week 8 you’ll discover a $140,000 insurance payment that apparently everyone knew about except the cash forecast.

This is why we ask questions.

Step 3: Stop Thinking Like the P&L

A cash forecast isn’t an income statement with different column headings.

An expense can be recognized today and paid later.

Revenue can be recognized before the customer pays.

Customers can pay before revenue is recognized.

Debt principal uses cash without appearing as an operating expense.

Depreciation is an expense that doesn’t require somebody to send a check.

CapEx can consume a great deal of cash while politely avoiding the income statement.

This is where people who live primarily in the P&L sometimes have to adjust their brains.

Cash doesn’t particularly care when Accounting recognizes something.

It cares when the bank account moves.

For 13 weeks, I want everyone thinking that way.

Step 4: Build the Weekly Model

The basic model doesn’t need to be complicated.

You can make this more sophisticated later.

I wouldn’t rush.

I want the first version to be understandable by someone other than the person who built it.

I’ve inherited enough financial models where touching one formula felt like defusing something.

Cash forecasting is not where I want that experience.

Step 5: Decide How Low Is Too Low

Knowing ending cash isn’t enough.

I also want to know:

At what point do we become uncomfortable?

The company may have a formal minimum liquidity requirement.

A debt agreement may create constraints.

Or management may establish an operating threshold based on payroll, vendor commitments and normal volatility.

Whatever the appropriate number is, make it visible.

Now the forecast becomes an early-warning system.

Maybe we’re fine today.

Maybe we’re fine next week.

But Week 9 shows cash dropping below the threshold.

Good.

Not good that we’re approaching it.

Good that we’re seeing it in Week 1.

We have eight weeks to be less surprised.

That is a much better position than discovering the problem in Week 8 and holding a meeting called Cash Update with 14 people invited.

Step 6: Build a Base Case You Actually Believe

This is where optimism can get expensive.

Your base case should represent what you currently believe is most likely to happen.

Not what you need to happen.

There’s a difference.

If a customer historically pays 15 days late, I’m not assuming they’ll suddenly discover punctuality because the cash forecast needs them on Thursday.

If financing isn’t committed, I don’t treat the proceeds like they’re already sitting at the bank.

If a large sale hasn’t closed, I’m not spending the customer’s money.

Put upside in an upside case.

The base case needs to survive a reasonably skeptical person asking:

Do we actually believe this?

I volunteer for that job quite often.

Step 7: Build Scenarios That Might Change a Decision

I don’t need 47 scenarios.

I’ve never seen a cash problem become easier because Finance created enough tabs to cover the entire bottom of Excel.

Give me the uncertainties that actually matter.

What happens if that large collection arrives two weeks late?

What if sales slow?

What if hiring happens faster?

What if a customer leaves?

What if the financing closes a month later?

What if a large vendor demands payment sooner?

Then comes the part I care about:

What are we going to do?

Delay hiring?

Push CapEx?

Reduce discretionary spending?

Accelerate collections?

Renegotiate payment terms?

Use available credit?

A downside scenario that ends with everyone saying, “Well, that would be bad,” hasn’t finished the assignment.

I already knew running out of cash would be bad.

I’m looking for the decision.

Step 8: Find Out Who Actually Knows

Finance may own the cash forecast.

Finance does not possess all the information required to build it.

That’s important.

Sales may know whether a large deal will close.

AR knows which customers are paying.

AP knows what’s coming due.

HR knows who’s being hired.

Operations knows what needs to be purchased.

Tax knows what’s owed.

Department leaders know what they’re about to spend.

And sometimes one person named Mike knows about a $200,000 payment nobody else seems to remember.

Find Mike.

The best cash forecasting processes create ownership around those inputs.

I want to know who stands behind the significant assumptions.

Otherwise Finance becomes the central repository for everybody else’s guesses.

Then our name is on the spreadsheet.

Convenient arrangement.

Step 9: Roll It Every Week

You don’t build a 13-week forecast and then spend the next 13 weeks watching to see whether you were right.

Each week:

Drop the completed week.

Replace forecast with actual activity.

Add another week to the end.

Update collections.

Update payments.

Move anything that changed.

Add new information.

Review the ending cash balance.

You’re always maintaining roughly 13 weeks of forward visibility.

And this is where the forecast starts getting interesting.

Because every week reality grades your assumptions.

No performance review required.

Step 10: Ask Why You Were Wrong

This might be my favorite part.

Compare forecast cash flows with actual cash flows.

Where did we miss?

Collections?

Vendor payments?

Payroll?

Taxes?

Timing?

Then don’t stop at:

We missed collections by $300,000.

Why?

Did a customer pay late?

Did we invoice late?

Was there a dispute?

Did Sales assume something Finance didn’t know?

Was our historical collection assumption wrong?

Did someone know the payment was moving and forget to mention it?

That last one is always enjoyable.

I don’t investigate misses because I expect the forecast to be perfect.

I investigate them because repeated misses usually tell you something about the business or the process.

Sometimes both.

The Weekly Cash Meeting Shouldn’t Become a Lifestyle

I like a short weekly cash review.

Short is important.

Thirty minutes is usually plenty if everyone comes prepared.

I want to know:

What moved?

What large receipts changed?

What large payments changed?

What’s new?

What’s uncertain?

Where is our lowest cash point?

Are we getting close to our minimum?

Do we need to do anything?

That’s it.

I don’t need a 42-slide deck about cash.

If liquidity is genuinely getting tight, the bank balance has already provided sufficient drama.

Common 13-Week Cash Flow Forecasting Mistakes

Treating AR Like Cash

An invoice is not money in the bank.

There are customers who have built entire personalities around demonstrating this distinction.

Starting With the P&L

The income statement answers a different question.

Forecast the timing of actual cash.

Giving Every Dollar the Same Attention

Materiality matters.

I don’t want Finance spending 45 minutes debating a $900 subscription payment while casually assuming a $750,000 customer receipt will arrive Friday.

One of these deserves more questions.

Being Too Optimistic About Collections

Expected cash and available cash are two different things.

The difference becomes increasingly interesting as your balance approaches zero.

Forgetting the Weird Stuff

Taxes.

Insurance.

Bonuses.

Debt payments.

CapEx.

Annual contracts.

The weird stuff becomes much less weird after it happens twice.

Never Comparing Forecast to Actual

Then the same assumptions can remain wrong indefinitely.

Very efficient.

Building Something Only One Person Understands

If the person maintaining your cash forecast can’t take a week off, you don’t have a process.

You have a hostage.

What I Start Noticing Once the Forecast Works

This is where the model becomes much more useful to me.

I’m no longer staring only at ending cash.

I’m watching behavior.

Are collections slowing?

Are customers stretching payment terms?

Are we hiring ahead of revenue?

Is inventory consuming more cash?

Are vendors asking for faster payment?

Is growth requiring more working capital than expected?

Are we consistently too optimistic about certain receipts?

Does our entire liquidity position depend on one customer paying on one particular Thursday?

That last one tends to get my attention.

A good 13-week cash forecast starts showing you how the business behaves.

Sometimes before the P&L makes the problem obvious.

That’s why I don’t think of this as just a treasury exercise.

It’s another way FP&A learns the business.

Do You Always Need a 13-Week Cash Flow Forecast?

No.

I’m suspicious of any finance person who thinks every company needs every finance process.

A business with substantial cash reserves, predictable collections and very stable spending may not need this level of weekly detail.

But I’d strongly consider a 13-week forecast when the company:

• has limited liquidity,
• is growing rapidly,
• has volatile collections,
• carries meaningful debt,
• has large working-capital swings,
• is restructuring,
• is preparing for financing,
• is going through an acquisition or integration,
• or simply doesn’t have enough visibility into short-term cash.

Build the process the business needs.

Not the one that looks most sophisticated.

The Spreadsheet Is the Easy Part

The mechanics of a 13-week cash flow forecast are pretty straightforward.

Beginning cash.

Money in.

Money out.

Ending cash.

Repeat.

I can teach someone the basic model fairly quickly.

What takes longer is getting good information into it.

Will the customer actually pay Thursday?

Is that hire really starting?

Is that purchase happening?

Is the financing actually closing?

Did anyone forget a tax payment?

Why did this move?

Who knows something Finance doesn’t know yet?

Those aren’t spreadsheet questions.

They’re business questions.

And that’s probably why I like the 13-week cash flow forecast so much.

It looks like a cash model.

But if you use it properly, it tells you quite a bit about the company.

How information travels.

How realistic people are.

How well departments communicate.

Whether assumptions have owners.

Whether bad news arrives early or waits until the bank account announces it.

Cash is wonderfully unforgiving that way.

It eventually settles the argument.

I’d just prefer FP&A know what it’s going to say a few weeks before everyone else does.