Cash flow forecasting is the discipline of knowing what cash will look like over the coming months, and being right. Most businesses between $3M and $30M do not do it. They have a bank balance, a feeling about the month, and an accountant who tells them what happened 60 days after it happened.

A 13-week cash flow forecast fixes that. It is the single most-requested finance artefact in every engagement Ajility runs, and it is the one most owners have never seen.

What a 13-week cash flow forecast actually is

It is a rolling view of cash in and cash out, week by week, for the next quarter. Not a budget. Not a P&L. Cash.

Thirteen weeks because a quarter is long enough to see a problem coming and short enough that the numbers are still real. Beyond 13 weeks you are guessing. Inside 13 weeks you are planning.

Rolling because every week the oldest week drops off and a new one is added at the end. The forecast never expires. It is never "the forecast we did in March".

In plain terms: it is the document that tells you whether you can make payroll in week nine, before week nine arrives.

Why the P&L does not tell you this

A profitable business can run out of cash. It happens every month somewhere in Australia, usually to a business that is growing.

The P&L records revenue when the work is done. The bank records cash when the customer pays. Between those two dates sits your debtor book, your supplier terms, your BAS, your super, and your wages. A business growing at 30% a year is funding that gap out of its own pocket, and the P&L will look fantastic right up to the week the overdraft is full.

Working capital is the corporate term. The owner's version is: the money is coming, it just isn't here yet.

What goes in it

Keep it to one page. One tab in a spreadsheet, 13 columns, and the following rows.

Opening cash. What is in the bank on Monday morning.

Receipts. Cash you expect to collect, by week. Start with the debtor ledger: every invoice outstanding, when it is due, and when that customer actually pays (which is not the same thing). Then add sales not yet invoiced, at a realistic collection date.

Payments. Wages and super on the dates they fall. Rent. Suppliers by their terms. Loan repayments. BAS and PAYG on the ATO's dates, not when you remember them. Owner drawings. Anything over $1,000 gets its own line.

Closing cash. Opening plus receipts minus payments. That number, 13 times across the page, is the forecast.

Minimum cash. One line, the floor you will not go below. Any week that dips under it is a decision, not a surprise.

How to build the first one in a week

Day one, pull the debtors and creditors ledgers out of Xero or MYOB. Day two, map every recurring payment to its real date. Day three, put the receipts in, using the customer's actual paying habit rather than the invoice terms. Day four, add the one-offs you already know about: the tax bill, the new vehicle, the insurance renewal. Day five, read it.

The first version is wrong. That is fine. The forecast gets accurate through the weekly update, not through the first build. By week six the variance between forecast and actual is usually inside 10%, and that is when the owner starts trusting it.

Who owns it and what the weekly rhythm looks like

The forecast needs one owner. Not the accountant, who sees the business after the fact. Not the owner, who will stop updating it the first busy week. Usually the bookkeeper or the finance person, with 30 minutes every Monday.

The rhythm is simple. Monday, update actuals for last week and roll the forecast forward one week. Then one question for the leadership meeting: is any week under the floor, and what are we doing about it.

That is the whole discipline. The businesses that run it stop having cash emergencies. Not because the cash problems go away, but because they turn into decisions made ten weeks early instead of ten hours late.

What it changes

Earlier in my career, in-house, I owned the annual planning process for a 249-store national retailer, including the forecast that sat underneath the budget, and the business delivered above-budget profit two years running. In a transport group, quarterly forecasting ran alongside four consecutive years of net profit growth.

The method does not need 249 stores. It needs one spreadsheet, one owner, and one Monday.

The next step

Ajility builds the 13-week forecast with you, hands it over with the Monday routine installed, and stays for the first three updates so the number is trusted before we leave. The service is called the Rolling Cash Forecast and it is priced on the site.

Read about the service or see the packages page for the price.

Questions founders ask

Common questions

What is a 13-week cash flow forecast?

A rolling, week-by-week view of cash in and cash out for the next quarter: opening cash, receipts, payments, closing cash and a minimum cash line. Every Monday the oldest week drops off and a new one is added, so it never expires.

Why do I have cash flow problems when the business is profitable?

The P&L records revenue when the work is done; the bank records cash when the customer pays. Debtors, supplier terms, BAS, super and wages sit in that gap, and a growing business funds it out of its own pocket. The forecast shows the gap before the overdraft does.

My cash flow forecast shows a shortfall in six weeks. What should I do?

Act in the weeks before the low point: bring receipts forward, chase overdue debtors, stage discretionary spend, agree terms with key suppliers and talk to the bank or your accountant early. Weeks of warning give options that days do not.

Who should own the cash flow forecast?

One named person, usually the bookkeeper or finance lead, with 30 minutes every Monday to update actuals and roll the forecast forward. Not the accountant, who sees the business after the fact, and not the owner, who stops updating it the first busy week.