A company can be profitable and still run out of money. The invoice is sent in March, the customer pays in May, and the rent, salaries and supplier bills fall due in between. Profit reports look backwards. A cash forecast looks forward and answers a plainer question: will there be enough in the account each week?
You do not need accounting software or a finance team for this. One sheet and a fixed weekly routine are enough for most companies with a handful of customers and a few dozen regular payments.
Why 13 weeks
Thirteen weeks is one quarter. It is far enough ahead to act on a problem, such as chasing invoices, delaying a purchase or talking to the bank, and near enough that your estimates are still honest. A twelve-month forecast turns into guesswork after the first two months. A one-week view shows the problem too late.
Use weeks, not months. Salaries, VAT payments and customer payments rarely fall on the first of the month, and a month hides the one bad week in the middle.
The sheet
Build one tab with these rows. Weeks run across, from this Monday for 13 columns.
Opening balance for the week. For week 1, take the real bank balance. For later weeks it is last week's closing balance.
Inflows (money expected in):
- Customer payments on issued invoices, by expected payment date
- Customer payments on invoices not yet issued, by expected issue date plus your customer's usual payment time
- Other income: grants, refunds, loan drawdowns, if they are confirmed
Outflows (money expected out):
- Salaries and contractor fees
- Rent and utilities
- Supplier invoices, by due date
- Tax and social contributions, by their payment dates
- Software subscriptions and other regular costs
- Planned purchases and loan repayments
Closing balance = opening balance + inflows − outflows.
Add one line below, Minimum balance, and colour the closing balance red when it falls under it. Choose the minimum before you see the numbers. A common choice is two to four weeks of fixed costs.
Enter money when it moves
The most common mistake is to use invoice dates. A customer who has paid in 45 days for the last four invoices will probably pay in 45 days again, whatever the contract says. Use their real habit. If you are not sure, take the slower of the last two or three payments.
Do the same for outflows. A supplier invoice due on the 28th belongs in the week of the 28th, not the week it arrived. Annual or quarterly bills, such as insurance and tax, belong in the week they are paid, which is exactly the type of cost a monthly view misses.
Be cautious on inflows and complete on outflows. If a payment is uncertain, move it one or two weeks later, or leave it out and mark it as an upside. For a larger customer that matters, add a note beside the line.
The Monday update
A forecast that is not updated is a decoration. Fix a time, for example Monday at 9:00, and name one owner and one backup.
- Replace last week's estimate with actual figures from the bank statement. Do not edit history; the difference between plan and reality is useful.
- Reset the opening balance to the real bank balance.
- Add a new week 13 at the right edge, so the sheet always looks 13 weeks ahead.
- Update the uncertain lines: which invoices were paid, which customers have gone quiet, which bills have changed.
- Look at the red cells and write one line below: what you will do about each.
The whole update should take 20 to 30 minutes. If it takes longer, you have too many lines. Group small items into one line such as "other regular costs".
What to do with a shortfall
A red cell six weeks away is a decision with time to spare. The usual options, roughly in order of how easy they are:
- Collect faster. Remind customers whose invoices are due soon or overdue. Our article on a late customer payments routine and on chasing a late invoice politely cover the steps. In the UK you may also be entitled to charge statutory interest and recovery costs on late commercial payments; see the GOV.UK guidance.
- Issue invoices earlier. Work that is finished but not yet invoiced is cash waiting in a drawer.
- Move payments, with agreement. Ask a supplier for a few more days before the date, not after it.
- Delay a purchase that is not urgent.
- Arrange financing early. A bank is more willing to talk before the account is empty. A forecast that shows the gap and the date it closes makes that conversation easier.
Write the decision next to the week it concerns, so you can see later whether it worked.
Link it to the month-end
The forecast and the monthly close use the same facts. When you do your month-end close, check that the actual cash for the month matches what the forecast predicted, and note the largest difference. After three months you will know where your estimates are usually wrong, for example late-paying customers, and can correct them directly.
Where AI can help, and where it cannot
A language model can help with the routine parts: reading a bank export and sorting lines into your categories, drafting reminder messages for overdue invoices, or listing which customers' payments have been slower than their terms. It should not decide the expected payment date of an important customer or the minimum balance. Those rest on what you know about the people involved. Keep the figures in a sheet you can read yourself, and treat any automated suggestion as a draft for the owner to check.
A first step
Open a blank sheet today. Enter the real bank balance, the next four salary and rent payments, and the five largest invoices you expect to be paid. That takes less than an hour and already shows more than most companies see. Then add the rest over the next two Mondays.
If you would like help building a cash routine that fits how your company works, see our AI consulting service.