Booksmrt / Reporting and planning
Build a 13-week cash-flow forecast that survives contact with the bank
A forecast is not a smaller P&L. It is a dated claim about when money will reach or leave a specific bank account—and a record of how wrong that claim was.
$13,200 cash remaining.
$15,000 operating floor.
A decision needed before the dip.
Week numbers along the horizontal axis. The dashed line is a management assumption, not a universal minimum.
| Week | Opening | Receipts | Payments | Ending |
|---|---|---|---|---|
| 1 | $28,000 | $14,000 | $18,500 | $23,500 |
| 2 | $23,500 | $9,500 | $13,800 | $19,200 |
| 3 | $19,200 | $22,000 | $19,400 | $21,800 |
| 4 | $21,800 | $11,000 | $15,600 | $17,200 |
| 5 | $17,200 | $16,500 | $20,500 | $13,200 ↓ |
| 6 | $13,200 | $24,000 | $14,700 | $22,500 |
| 7 | $22,500 | $14,000 | $18,500 | $18,000 |
| 8 | $18,000 | $18,000 | $16,000 | $20,000 |
| 9 | $20,000 | $21,000 | $22,500 | $18,500 |
| 10 | $18,500 | $16,500 | $15,700 | $19,300 |
| 11 | $19,300 | $24,000 | $19,200 | $24,100 |
| 12 | $24,100 | $17,000 | $16,300 | $24,800 |
| 13 | $24,800 | $26,000 | $21,000 | $29,800 |
Week 5 ends at $13,200: a $1,800 shortfall against the operating floor. The model exposes the week when a decision is needed.
A reliable 13-week cash forecast starts with reconciled opening cash, schedules customer receipts by expected collection date, schedules disbursements by actual due or payment date, and separates committed amounts from assumptions. Update it weekly, compare forecast with actual cash movement, and preserve the variance explanation. In the complete worked forecast, cash falls below the $15,000 operating floor in week 5; delaying one receipt moves the first breach to week 3. Profit cannot be inferred from this cash schedule alone.
Anchor week 1 to reconciled cash
Use available cash by account at a specific cutoff, adjusted for known restrictions and bank timing. Do not begin with the balance sheet if its cash has not been reconciled. Do not include undrawn credit as cash.
The worked forecast begins Friday, July 3 with $28,000. The reconciliation is complete, and a separate $10,000 tax reserve is excluded from operating cash. That definition remains fixed for every weekly update.
Source notes: Publication 583: Starting a Business and Keeping Records · Money Smart for Small Business: Managing Cash Flow
Schedule receipts from evidence, not hope
Start with open invoices, customer terms, payment history, processor settlement lags, and recurring billing. Assign each receipt to a week and a confidence class. A signed contract is not a cash receipt; an invoice due date is not the same as an expected collection date.
The model places a $22,000 customer payment in week 3 because the invoice is accepted and the customer historically pays within three days of terms. A less certain $18,000 project milestone remains outside the base case until approval evidence exists.
Source notes: Money Smart for Small Business: Managing Cash Flow · Manage your finances
Schedule disbursements by obligation and date
Separate payroll, tax deposits, rent, debt service, critical vendors, discretionary vendors, owner distributions, and capital spending. Use payable detail and contracts rather than applying a flat expense percentage to revenue.
Payroll and tax dates create the week-5 low point. Moving an ordinary vendor payment may be negotiable; moving payroll taxes without professional review is not a casual liquidity tactic. Label controllable and non-controllable payments explicitly.
Source notes: Money Smart for Small Business: Managing Cash Flow · Publication 15: Employer's Tax Guide
Use scenarios without hiding the base case
Keep a single evidence-based base case. Add downside and upside scenarios by changing named assumptions, such as a collection moving two weeks or a purchase being deferred. Do not blend optimistic and conservative values until no one can tell what changed.
In the downside case, the $22,000 receipt moves from week 3 to week 5, causing a week-3 deficit. That scenario gives management time to accelerate collections, arrange funding, renegotiate timing, or reduce optional outflows before the bank balance forces the decision.
Source notes: Money Smart for Small Business: Managing Cash Flow
Turn forecast error into operating information
Each week, replace projections with actual bank movement and categorize the variance: timing, amount, omission, classification, or model assumption. Roll the horizon forward so it always covers 13 future weeks.
A forecast that is never compared with actuals cannot improve. Track customer collection bias, payroll variance, unplanned vendor payments, and excluded fees. The objective is not perfect prediction; it is earlier, better-informed action.
Source notes: Money Smart for Small Business: Managing Cash Flow · Manage your finances
The weekly meeting
Replace last week with actual bank activity. Explain the difference. Re-date unsettled invoices. Add one new week. Assign an owner to every projected floor breach.