Build a 13-week cash forecast

Direct answer

For this review, lead with a 13-week cash forecast as the practical model, then explain top-down vs. bottom-up forecasting.

Why this question comes up

Founders do not trust static forecasts because cash timing, late invoices, hiring, and fundraising dates keep moving. This guide turns that concern into a review that can be repeated with a defined period, consistent inputs, and a visible trail back to the records.

Records to gather

• Reconciled opening cash by account
• Open A/R with customer-level payment history, not just terms
• Open A/P with due dates and any supplier arrangements
• Payroll calendar including tax deposit dates and any 3-payroll months
• Debt service schedule and recurring transfers
• Known one-offs: tax payments, insurance renewals, deposits, capex

Review workflow

1. Work in weeks, starting Monday. A 13-week horizon covers a quarter while staying granular enough to see a mid-month payroll squeeze that a monthly view hides entirely.
2. Start from reconciled cash. Every forecast is only as good as its opening balance.
3. Time receipts by behaviour, not terms. If a customer on net-30 has paid at day 52 for six months, forecast day 52. Historical payment behaviour beats contractual terms every time.
4. Place payroll and tax on exact dates. These are the least flexible outflows and the most likely to cause a week to go negative. Watch for months with three payroll runs.
5. Roll it forward weekly. A 13-week forecast is a habit, not an artefact. Each week, drop the past week, add a new week 13, and record where actual differed from forecast.
6. Track forecast accuracy. Log the variance each week. After a quarter you will know whether your collection assumptions are systematically optimistic — most are.

What a useful answer should include

• Weekly opening balance, receipts, disbursements, and closing balance
• The lowest projected balance across the 13 weeks and the week it occurs
• Collection timing based on observed customer behaviour, with the assumption stated
• Payroll, tax, and debt service on their actual dates
• A variance column comparing the prior week’s forecast with what happened
• Explicit flags on any week projected below the operating minimum or a covenant floor

Common failure modes

• Forecasting monthly and calling it cash management. A month that nets positive can still contain a week where payroll does not clear.
• Using invoice terms as collection dates. This is the single largest source of forecast error, and it is always optimistic.
• Never comparing forecast to actual. Without a variance log the forecast never gets more accurate; it just gets re-made.
• Leaving out the payroll calendar. Three-payroll months arrive twice a year and surprise businesses that forecast on a monthly average.
• Building it once. A 13-week forecast that is not rolled weekly is a snapshot, and it decays fast.

Community context

The linked community posts show why people search for this topic and which parts create confusion in practice. They are anecdotal. Use the reference sources and your organization’s policies for accounting treatment, tax, compliance, and final decisions.