A cash flow forecast sounds like something only accountants build. In reality, a useful one fits on a single spreadsheet tab, and you probably already know most of the numbers that go into it.
Why 13 weeks?
Thirteen weeks is one quarter. It is long enough to show you a tight patch before you are in it, and short enough that your estimates stay reasonably accurate. Weekly columns also line up with how most owners think about wages and bills.
Step 1: Start with today’s bank balance
Put your actual opening cash balance in the first column. Use the real number from your bank, not what the accounting software says it should be.
Step 2: List the money coming in
For each week, estimate the cash you expect to receive. Work from what customers actually owe you and when they usually pay, not when the invoice is due. Add any regular income you can rely on.
Step 3: List the money going out
Add your regular outgoings week by week:
- Wages and super
- Rent and utilities
- Supplier payments
- Loan and lease repayments
- GST, PAYG and other tax payments
- Your own drawings
Step 4: Calculate the closing balance
Opening balance plus cash in, minus cash out, gives you the closing balance. That becomes the opening balance for the following week. Thirteen columns later, you have a picture of the quarter ahead.
The forecast is only valuable if you update it. Ten minutes every Monday is enough.
Step 5: Look for the low points
Highlight any week where the closing balance dips below a level you are comfortable with. That is your early warning. You now have time to chase debtors, move a purchase, talk to your bank or plan around it.
Keep it honest
Each week, replace the estimates with what actually happened and roll the forecast forward by one week. Over time you will get better at estimating, and you will start to trust the numbers enough to make decisions from them.
Free template: put this into practice with our 13-week cash flow forecast template. Download PDF · Download Excel
