How to Build a 13 Week Cash Flow Forecast

If you run a business, you have probably felt this before. You look at your bank account and you are not sure if you will be okay in three weeks. That feeling usually means you need a 13 week cash flow forecast. It is one of the most useful tools I use with clients, and you can build one yourself in Excel.

Here is how to do it.

Step 1: Open Excel and set up your columns

Make each column one week. You will have 13 columns total, one for each week you are planning ahead.

Step 2: List your expenses first

Most people want to start with income, but expenses are easier to predict. Look back at your last few months of bills. You will start to see a pattern. Rent might come out on the first. Payroll might hit every other Friday. Once you see that pattern, put each expense in the week it usually gets paid. This will not be perfect. That is okay. It gives you a solid starting point, and it gets more accurate every time you update it.

Step 3: List your income, starting with what you already know

Some income is easy. If you have recurring revenue, like a retainer client or a subscription, you already know when that money is coming in. Put that in first.

Step 4: Estimate the income that is harder to predict

This is where a lot of business owners get stuck. Not every customer pays on time. So instead of guessing blindly, use your accounts receivable aging report. Say your aging report shows $200,000 in outstanding invoices. You will not collect all of that on schedule. You might realistically collect half a percent of it in week one, and a little more each week after that as older invoices get paid down. The exact percentage will depend on your business and your customers, but the point is to base your guess on a real number instead of a gut feeling.

This step matters more than people think. I have seen a $15,000 shortfall show up in week seven of a forecast, simply because a company had not accounted for how slow their receivables actually paid. If they had not caught that early, they would have been short on payroll with almost no warning.

Step 5: Calculate your ending balance

Each week should follow the same formula. Beginning balance, plus income, minus expenses, equals ending balance. That ending balance becomes next week's beginning balance. Do this across all 13 weeks.

Step 6: Update it and get sharper every time

Once your 13 weeks are up, start the process again. Compare what you predicted to what actually happened. You will notice where you were off, and you will get better at predicting both your expenses and your income every single time you rebuild it.

A 13 week cash flow forecast will not be perfect the first time. It does not need to be. What it gives you is thirteen weeks of visibility instead of one. That is enough time to catch a problem and fix it before it becomes an emergency.

If building this out feels like a lot on top of everything else you are running, I will set it up for you for free. Just reach out to me directly at markus@revampfinances.com.