Blog Article

Common Cash Flow Problems and How a 13-Week Forecast Fixes Them

Most cash crunches are not profit problems. They are timing problems, and timing is something you can see coming. Thirteen weeks is close enough to forecast honestly and far enough ahead to still have options.

So, when we forecast a cash flow, we don't like to think too far in advance, although you can do a good projection of a year-long cash flow. But when we get into the later months, we are really doing hypothetical. Unless you have a very streamlined reoccurring type of business, you just never know what's going to pop up. But what can be super useful is using a 13-week cash flow. So just a very couple of months ahead of time really dialing in when you are going to see that money coming in and when you are going to see that money going out. So it's yeah just looking at that trying to see if there's going to be any problems that arise. If you are feeling very cash tight a lot of times like different periods of the month, we can create this cash flow to really streamline and review what might be happening with your cash and can we shift things around to make your anxiety go down and feel better about where your bank account lands any time of the month and catching those things before they actually happen. So we definitely see it in our CFO practice. We use it with our business owners and sometimes lenders like to see these depending.

So how do you create a cash flow forecast? So the first thing that we're going to do is start of course with the beginning cash that we have. So any cash that you are holding that you can utilize for money going in or money going out we want to look at that. So and this is this is not credit cards or anything like that but we want to look more on our physical cash. So bank accounts, savings accounts and if you have pending maybe you've received some funds in a check you just haven't taken those to the bank. Those are part of our starting current cash. But we really want to dial this in and make sure that our accounts are reconciled, that we're using using a very clean, clear number so that the rest of the forecast can truly be how it should.

The next thing that we're going to look at is all of the inflows that we have. So, a lot of times companies will have invoices and due dates for these invoices. And hopefully you have customers that are landing on these specific due dates, but sometimes you don't. So, it's really gathering up all of your invoices that you have, seeing when things are due, and kind of adjusting to see, oh, okay, well, we see that something is coming due in 4 weeks. Are we going to actually receive that cash or are we going to see it maybe in week five instead? Or maybe you have some sort of discount available and this particular customer likes to pay and get that discount. Well, we actually see that in week two instead of week four. So, this is really where we're putting specifically where we're going to see the cash. And this can be any refunds that you know are happening. Maybe you have a tax return that will be coming and it's going to be showing up in week six. We'll want to put that in week six. If you, yeah, like going through your customer payments, if you have any loans that you have some capital that's coming in, maybe you have a partner that is lending money over and they're going to get it next week. So, you can input that in next week, it can't help us this week, but it can help us next week and moving forward. And so, just yeah, focusing on specifically what date this is coming in. And I guess let me back up. When I say week, I mean you're choosing a specific I like to choose Sunday through Saturday or a Monday through Sunday, but you want to look at your cash forecast at the beginning of the week, not at the end of the week, because this is where all of the bank transactions are coming through and making sure that things are paid. So yeah, just kind of reviewing all of all of the dates and timing of the cash.

Next, we have our cash outflow. And so this is specifically when things are going to be due. So we have our regular payroll. Does that employees have direct deposits and they're paid every Friday, but it actually comes out of your bank on a Wednesday? So you need to know that information. You need to make sure that maybe you have that money the week prior to. So it comes out on week five, it comes out on week seven. So you need to actually have the money on week four and week six. Do you have loan payments? This is where reoccurring things are showing up. Any subscriptions that you may have, your tax payments coming in April and June and September. If your owner is doing owner draws on a regular basis, when do these come out? And also, we should have some bills that have specific due dates. If you have any lending that's any terms with people, so if you can pay a net 30, net 60, you want to make sure that you're inputting those specific times. And at this point, you're saying, "Okay, yeah, this should be about when we're pulling this money and putting it in those specific weeks." This is where you can really see where you might have some problems coming up.

And then yeah, this is where we actually what is this telling us? So we have the cash coming. We have the beginning cash all of we're going to add in our cash that is coming in our invoices payments from any loans or anything like that. And then we have our cash out. We're going to subtract that out. And that leaves us with our ending cash for the week, what we think may or may not happen. And so then that's week one. And then week two is your beginning your starting cash is going to be the previous week's ending cash balance. That's going to be your beginning week, the following beginning week. And we'll look at an example here very shortly. But as you see this kind of going through, you can really see, oh, I'm seeing that we're totally fine for the first month, but we're actually having a huge problem in week five. We are in negative $2,000, $10,000 in the bank. We won't have money. What do we need to do? Can we promote some invoices coming in? Do we need to have a some money inserted from business owners or do you maybe need to hold off on paying some of your vendors? But we can really guide and see this 13 week and where we need to shift things around.

We don't actually shift anything around until we do all of the placements for we're 90% confident that this is when cash in will hit and then we're 90% confident that this is when cash out will hit and then from there we're analyzing do we need to shift things around here or there to make sure that we're always positive in the bank account. This is kind of an example of a cash flow that you can see. So here we have our beginning balance. We have some checking accounts. We have a PayPal account and then payments that are still pending. This particular one we don't have any of those. So but we have our beginning cash here. And then this current week is 31. So each week, 7 days, we have this rolling 13-week timeline that we can see. This top line, we're going to be inputting when we know that we're going to be receiving cash. And then all of these maybe adjustments and unexpected things that we know are also going to pop up that maybe our software that information isn't there. So if you have invoices, maybe you just have a one-time occurrence or something like that. Then down below we have our bills here as well. Again, say doing the time rhythm of what's already within QuickBooks if you have if you're entering in bills. And then adding adjustments along the way. You're adding in your different vendor bill or tax bill. So in week one, we have, you know, we start with our beginning cash. We add in our week one information. I need to get a better mouse. That's okay. And then we have our bills down here. And so at the end of the week, although at the beginning of the week we start with $14,000, we can see at the end of the week we're ending with 5600.

And as the time goes on, we can see that we actually are in a crunch here around 3:22. So in a couple weeks in four weeks. So what do we need to do in order to shift that? Now, it may not be a lot, but it is enough for us to be like, "Okay, well, we might want to maybe we can't pay in full the vendor bill. Maybe we want to pay $3,000 instead of $4,000." And then we can also see that as time goes on, we're hitting all of these negatives. And so, we really want to take into account, you know, how can we get more money coming in so that we can pay our bills. So, yeah, why it matters? It matters so because we can forecast out and show when cash problems are really going to arise. So, it's important to stay on top of this and really look at it on a regular basis. It's something that it does take some time to set up, but once you have a rhythm and a system in place and how to update it, it can only take about 15, maybe 30 minutes as you're analyzing and moving things around to really have a good grasp on what's going to happen in the next week. It helps you plan and spend, not have these crisises, and it also gives you confidence in making sure that you can hit your payroll and your employees are staying happy. You hit your payments to your vendors, that they're staying happy, and that you have that you have money all all around. Revenue is really important, but what really matters and keeps the doors open is going to be that cash. Once you know your numbers, you can own your future. That's it for today. Thank you so much for joining us. I again am Jenn Shaw. I'm with All Accounting. And if you are feeling like this is exactly what you are needing, but you just are unsure exactly how to set this up, we are certainly here to help with that, to guide you along the way. We are your accountability buddy people that will help you really dive into your numbers on a regular basis to keep you consistent and keep showing up. I hope to see you next week and enjoy your weekend.

A 13-week cash flow forecast maps exactly when money will land in your bank account and when it will leave, week by week, for the next quarter. You start with the cash you hold today, add your expected inflows, subtract your outflows, and carry the ending balance into the following week. It shows you a shortfall weeks before it happens, while you still have time to do something about it.

Why 13 weeks instead of 12 months?

You can build a year-long cash projection, and there is value in it. The problem is that the later months turn hypothetical. Unless you run a very streamlined, recurring type of business, you simply do not know what is going to pop up that far out.

Thirteen weeks is close enough to be real. You are looking a couple of months ahead and genuinely dialing in the timing, which is where cash problems actually live.

It is especially useful if you feel tight during certain stretches of the month without understanding why. Building the forecast lets you see what is happening, shift things around, and feel settled about where your bank account lands at any point in the month. We use it throughout our CFO practice with owners, and lenders sometimes want to see one as well.

This is a different tool from a 12-month rolling forecast, which is built for seasonality and longer-range planning. Use the rolling forecast to plan the year and the 13-week to manage the cash.

Common Cash Flow Problems

Slow receivables
Large upfront costs
Poor billing schedules
No forecasting

How do you build a 13-week cash flow forecast?

1. Start with your beginning cash

Begin with the cash you are actually holding and can use for money going in or out. This is physical cash, not credit cards or available credit.

That means your bank accounts, your savings accounts, and any pending funds, such as a check you have received but have not taken to the bank yet.

Dial this number in. Make sure your accounts are reconciled so you are working from a clean, clear starting figure. Everything downstream depends on it, which is one more reason reconciliations matter.

2. Map your cash inflows

Gather every invoice you have and note when each is due. Then adjust from what is due to what you will realistically receive.

If something comes due in week four, ask honestly whether the cash arrives in week four or slips to week five. If a particular customer likes to take an early payment discount, you might see that money in week two instead. The goal is to place the cash in the week it will actually hit.

Include everything else coming in too:

Customer payments
Refunds you know are coming, such as a tax return arriving in week six
Capital coming in, like a partner lending money to the business next week

Money arriving next week cannot help you this week, but placing it accurately shows you what it does help.

3. Pick your week and map your outflows

First, define your week. Sunday through Saturday or Monday through Sunday both work. Review the forecast at the beginning of the week rather than the end, because that is when bank transactions are clearing and you are confirming things get paid.

Then place everything going out on the date it is actually due:

Payroll. Watch the timing carefully. If employees are on direct deposit and get paid Friday, the money may leave your bank on Wednesday. If payroll hits in weeks five and seven, you need the cash in weeks four and six.
Loan payments and any other recurring obligations
Subscriptions
Quarterly estimated tax payments (see estimated tax payments for the full schedule)
Owner draws, if they come out on a regular basis
Bills with specific due dates, including vendor terms like net 30 or net 60

4. Do the weekly math

Take your beginning cash, add the cash coming in, subtract the cash going out, and you have your ending cash for the week.

Then week two begins with week one's ending balance. Repeat across all thirteen weeks and the timeline rolls forward with you.

How do you read the forecast and act on it?

Patterns show up quickly. You may find the first month is completely fine, then week five drops to negative two thousand or negative ten thousand dollars. That is the whole point: you found it while there is still time.

From there you have levers:

Push to bring invoices in sooner
Have an owner put money in
Hold off on paying some vendors, or pay partially. Three thousand dollars toward a bill instead of four thousand can be enough to bridge a week.

One discipline matters here. Do not start shifting anything until every placement is made and you are roughly 90% confident about when the cash in will hit and when the cash out will hit. Once the timing is solid, then you analyze what needs to move so the account stays positive.

How to Improve Cash Flow

Invoice Faster: Don't wait until the end of a job.
Track Receivables Weekly: Not just at month-end. Stay ahead of what's owed to you.
Follow up consistently: A simple reminder can speed up payments significantly.
Plan Ahead: The 13-week forecast above is how you see the slow weeks before they arrive.

How much time does it take to maintain?

Setting it up takes some work up front. That part is real.

Once you have a rhythm and a system for updating it, though, you are looking at roughly 15 to 30 minutes to review, adjust, and get a solid grasp on the weeks ahead.

What you get for that is the ability to plan your spending instead of managing crises, plus the confidence that you can hit payroll and keep your employees happy, and pay your vendors and keep them happy too.

Revenue matters. But what keeps the doors open is cash.

Cash flow issues don't mean your business is failing. It usually means your system needs adjusting.

If your profit and loss says you made money but the bank account disagrees, that is a timing problem, not a profit problem. We break it down in profitable but broke, and in why your net income isn't yours.

Key takeaways

Thirteen weeks is close enough to stay realistic. Beyond a few months, a cash forecast turns hypothetical.
Start from reconciled cash on hand: bank accounts, savings, and undeposited funds. Not credit cards.
Place inflows in the week you will actually receive them, not the week the invoice says.
Watch payroll timing closely. Direct deposit can leave your account days before payday.
Beginning cash plus inflows minus outflows equals ending cash, which becomes next week's beginning.
Do not shift anything until you are about 90% confident on timing.
Once the system exists, maintaining it takes roughly 15 to 30 minutes.

Frequently asked questions

What is a 13-week cash flow forecast?

A week-by-week projection of cash coming in and going out over the next thirteen weeks. It starts with the cash you hold now and rolls each week's ending balance into the following week.

Why 13 weeks rather than a full year?

A year-long projection becomes hypothetical in the later months, because you cannot know what will come up. Thirteen weeks stays close enough that the timing is realistic and actionable.

What counts as beginning cash?

Cash you actually hold and can use: bank accounts, savings accounts, and pending funds such as a check received but not yet deposited. Credit cards and available credit do not count.

What do I do when the forecast shows a negative week?

You have three main options: accelerate incoming invoices, have an owner put money in, or delay or partially pay some vendor bills. Wait until your timing is about 90% confident before you start moving things.

How often should I update it?

Review at the beginning of each week, when bank transactions are clearing. Once your system is set up, that review usually takes 15 to 30 minutes.

Know your numbers. Own your future.

👉 We help contractors build predictable cash flow systems through our Virtual CFO service, and we will set the forecast up with you and keep you consistent. If you're looking for accounting support, reach out to the team, we're happy to connect to see if we're the right fit.