A profitable month can still contain a week when payroll comes due before customers pay. That gap is what a 13-week cash flow forecast is built to catch. It shows the cash you expect to receive and pay out each week, then carries the ending balance into the next week.
For a small business, the useful version is not a complicated model. It’s a rolling list of likely deposits, committed payments and decisions you can still change. Build it in a spreadsheet, update it every week and pay close attention to the lowest projected balance—not just the balance at the end of week 13.
Start with cash you can actually use
Set up 13 columns, one for each of the next 13 weeks, plus a column for notes or assumptions. Pick a consistent week-ending day. A Friday-to-Thursday view may suit a business that runs payroll on Fridays; a Monday-to-Sunday view may be easier if you review finances every Monday. The choice matters less than using it consistently.
Begin with the cash available at the start of week one. Reconcile your bank accounts first, and account for outstanding checks or payments that have been initiated but haven’t cleared. If you include a savings account, make sure the money can be transferred in time to pay bills. Don’t count an undrawn credit line as cash.
Keep the forecast separate from your profit-and-loss statement. Revenue can be recorded before a customer pays, while a loan principal payment or equipment purchase uses cash without appearing as an ordinary operating expense. The FDIC’s small-business financial guide distinguishes projected cash receipts and payments from reported profit for precisely this reason.
The basic calculation for every column is:
Opening cash + cash received − cash paid = ending cash
Next week’s opening cash equals this week’s ending cash. That link between columns is what lets a late payment in week three show its effect in weeks four through 13.
Put receipts in the week they’re likely to arrive
Start with money owed to you, not next quarter’s sales goal. Review open invoices, customer payment history, scheduled card settlements, signed contracts and expected deposits. For each receipt, ask two questions: How much will reach the bank? and when?
An invoice due in week two isn’t automatically week-two cash. If that customer typically pays 10 days late, place it in the later week unless you have a credible reason to expect faster payment. Allow for processing time on card sales and marketplace payouts. If payment fees are deducted before a deposit reaches your account, forecast the net deposit—or show the gross receipt and fee separately, but don’t do both.
Separate receipts by how dependable they are:
- Scheduled: A payment has been initiated or a settlement date is visible.
- Expected: The work is done or an invoice is open, with a reasonable collection date based on the customer’s record.
- Possible: A proposal, unsigned order or hoped-for early payment.
Use scheduled and expected receipts in the main forecast, with conservative dates. Track possible receipts outside the base case. Otherwise, a promising sales conversation can make next month’s payroll look funded when it isn’t.
If your business takes deposits before doing the work, show the deposit when it should reach the bank and the remaining payment when you expect to collect it. Record each amount once. The forecast should reflect the timing of cash, not the date you won the job.
Forecast payments from a calendar, not a monthly average
A monthly expense report is a useful cross-check, but it won’t tell you which Thursday a payment hits. Pull together your accounts payable list, payroll calendar, recurring charges, loan schedule, purchase orders and upcoming tax payments. Then place each outflow in its likely payment week.
Useful rows include payroll and benefits; rent and utilities; inventory or materials; contractors; insurance; software and merchant fees; taxes; debt service; equipment purchases; and owner draws or distributions. Keep large or irregular items visible rather than burying them in “other.” A quarterly insurance bill is easy to miss when recent weeks have been quiet.
Use the amount that will leave the account. For payroll, make sure wages, employer costs, benefit payments and tax deposits are represented without counting the same money twice. Check the timing of federal employment tax deposits against your business’s actual schedule: IRS deposit due dates depend on factors including the applicable return and deposit schedule, and deposit deadlines can differ from return-filing deadlines.
Mark which payments are committed and which you can move. You may be able to postpone an optional equipment order; that doesn’t make rent or a tax obligation flexible. For uncertain costs, write down the assumption behind the number. “Materials for two confirmed jobs” is more useful at next week’s review than “supplies: $4,000.”
A practical sheet needs only a few summary rows:
| Forecast row | What goes in it |
|---|---|
| Opening cash | Cash available at the start of the week |
| Customer receipts | Expected deposits from sales and invoices |
| Other receipts | Financing proceeds or other inflows, only if timing is credible |
| Total cash in | Sum of receipts, excluding opening cash |
| Total cash out | All payments expected to leave the bank |
| Net change | Total cash in minus total cash out |
| Ending cash | Opening cash plus net change |
| Cushion above minimum | Ending cash minus your chosen cash floor |
The FDIC’s sample cash flow projection carries ending cash into the next period and includes both operating and non-operating uses of cash. A weekly sheet applies that same calculation 13 times.
Find the shortfall before you decide what to spend
Suppose a repair shop starts with $12,000. Its first four weeks look like this; the figures are illustrative.
| Week 1 | Week 2 | Week 3 | Week 4 | |
|---|---|---|---|---|
| Opening cash | $12,000 | $11,000 | $5,000 | −$2,000 |
| Cash in | $9,000 | $6,000 | $2,000 | $15,000 |
| Cash out | $10,000 | $12,000 | $9,000 | $8,000 |
| Projected ending cash | $11,000 | $5,000 | −$2,000 | $5,000 |
The negative week-three figure is a warning, not a workable bank balance. A large payment in week four does not pay a week-three bill. If the owner wants to maintain a $4,000 operating cushion, the plan needs to improve by $6,000 in week three—not merely by $2,000 to reach zero.
That distinction changes the response. Moving a $3,000 optional purchase from week three to week four would prevent the negative balance, but week three would still close at only $1,000. The owner would need another credible change to preserve the $4,000 cushion. For example, collecting an agreed $3,000 customer payment a week earlier would bring the projected week-three balance to $4,000. Both changes must be reflected in week four as well; shifting cash between weeks does not create more cash overall.
Set your cash floor based on the payments you must make and the uncertainty in your receipts. There’s no universal dollar amount. Then scan every week for two signals: a negative ending balance and a balance below your floor. The second often gives you time to act before the first appears.
Weekly totals can also hide a problem inside a week. If payroll leaves on Tuesday and a major customer deposit arrives Friday, a positive Friday balance may be misleading. When the cushion is thin, break that week into daily receipts and payments.
Use the forecast to choose an action
When a shortfall appears, trace it to the few receipts and payments driving the low point. Is one customer payment late? Is inventory due before the related sales come in? Did several annual bills land together? The answer tells you which actions are worth pursuing.
Start with changes you can verify: follow up on overdue invoices, confirm a customer’s payment date, bill completed work promptly or revise the timing of a discretionary purchase. You can also ask a supplier whether different terms are available. Don’t move a supplier payment in the sheet until the supplier agrees to the change.
If timing changes won’t close the gap, evaluate financing early rather than assuming approval or immediate access to funds. Show any proposed loan or credit draw in a separate scenario until it is available on known terms; include its fees and repayments in later weeks. Likewise, test a delayed-receipts scenario by moving your largest uncertain collections back a week or two. If that version fails, the base forecast may be too fragile to support new spending.
A forecast is useful when it changes a decision. Before approving a hire, inventory buy or owner draw, enter it in the week the cash would leave and check the lowest balance across all 13 weeks. A purchase that fits next week’s bank balance may still create a problem at the next payroll or tax date.
Roll the plan forward every week
Choose one day each week to reconcile the actual bank balance, replace last week’s estimates with actual receipts and payments, and add a new week at the far end. The horizon should remain 13 weeks rather than shrinking toward an old end date.
Compare what happened with what you expected. A receipt that didn’t arrive should move to a newly supported date; it shouldn’t simply vanish from the forecast. A bill paid early should come out of its former week. Note the reason for the largest differences. If the same customer repeatedly pays later than forecast, change the assumption you use for that customer.
Keep the model simple enough to maintain. Accounting software may help gather invoices and bills, but review dates and amounts against your bank activity and what you know about customers. The U.S. Small Business Administration recommends maintaining bookkeeping and tracking accounts receivable, accounts payable and available cash; those records are the foundation for a forecast you can trust.
The goal isn’t to predict every deposit exactly. It’s to know, soon enough to act, which weeks need cash and which spending decisions would make those weeks harder.