Part 1 of 3 in the Bedrock Financial Management Series
Cash flow is your business's lifeblood. Stellar profits on paper mean nothing if cash isn't there when you need it. As a fractional CFO/CTO, I've seen too many profitable businesses fail by not answering one simple question: *"How much cash will we have in our bank account 13 weeks from now?"*
In 90 minutes, I'll show you how to build a rolling 13-week cash flow forecast. It will become your early warning system, strategic planning tool, and peace-of-mind generator.
Why 13 Weeks? The Magic Number Explained
Cash flow doesn't care about monthly reports or quarterly reviews; it flows daily. A 13-week forecast provides:
Immediate visibility for the next 4-6 weeks—where most issues arise.
Medium-term planning to make proactive decisions.
A complete quarterly picture aligning with common reporting cycles.
Rolling flexibility, keeping you perpetually looking ahead.
Pro Tip
The magic is in consistently having 13 weeks of forward visibility.
The 90-Minute Framework: Build Once, Use Forever
Forget complex, quickly obsolete models. My approach is fast to build, easy to iterate, and focused on essential accuracy.
15 min Pre-Work: Gather Your Data
Before touching a spreadsheet, collect these five key data points:
Current bank balance (as of this morning)
Outstanding receivables aging report
Payroll schedule for the next quarter
Major payables due in the next 90 days
Monthly recurring revenue (if applicable)
Don't Get Lost in Details
If you can't find data quickly, estimate and flag for later refinement. Perfect data often delays good planning.
30 min Week 1: The Foundation
Start with Week 1. It's the most predictable, building confidence in your model.
💰 Cash In:
Collections from existing receivables (based on aging and historical patterns)
New sales closing and collecting this week
Other income (loan proceeds, asset sales, etc.)
💸 Cash Out:
Payroll and benefits
Rent and utilities
Loan payments
Other fixed commitments
Week 1 Reality Check
Week 1 should be 90% certain. If you're guessing what happens in the next seven days, you have bigger problems.
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Quick Collection Rate Calculator
For accounts receivable, apply estimated collection rates:
Adjust these percentages based on your industry and historical data.
40 min Week 2-13: Extending Your Vision
Extend your forecast by applying logic and informed assumptions. This reveals potential shortfalls or surpluses well in advance.
🔍 Projecting Income and Expenses:
Recurring Revenue: Highly predictable for subscriptions (SaaS, memberships).
Sales Pipeline: Get realistic close/collection dates from your sales team.
Variable Expenses: Use historical data (e.g., COGS as a % of revenue).
One-Time Events: Factor in irregular payments (annual software, tax, equipment).
Don't Over-Engineer
Aim for directional accuracy, not perfect precision. Focus on major cash flow drivers.
The Power of Scenarios: Best, Worst, and Most Likely
A single forecast is a guess; scenarios make it a strategic tool. Know what happens if things go better or worse.
20 min Scenario Planning
Create three distinct scenarios:
Best Case: Sales accelerate, prompt collections, new opportunities.
Most Likely Case: Your realistic base forecast.
Worst Case (Stress Test): Major client delays payment, project postponed, unexpected expense. This is your "sleep at night" scenario.
Actionable Insights from Scenarios
If your "worst case" shows cash depletion in Week 8, you know to act now. The forecast becomes your most powerful proactive tool.
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Scenario Modeling in Practice
In your spreadsheet:
Use separate tabs for Best, Most Likely, Worst scenarios.
Apply simple percentage adjustments to key revenue/expense lines.
Highlight the lowest cash balance week for each scenario.
Example for Worst Case Revenue:
='Most Likely'!B2 * 0.8 (Reduce revenue by 20%)
Example for Worst Case Expense:
='Most Likely'!C2 * 1.15 (Increase expenses by 15%)
Daily Discipline: Make it a Habit
The initial 90 minutes are a sprint. The real value comes from consistent weekly updates.
5 min/week Weekly Review & Update
Every week, make it a point to:
Update with Actuals: Replace past week's forecast with actual cash flows.
Add a New Week: Project one more week out, maintaining 13 weeks.
Adjust Assumptions: Refine future projections based on new info.
Review Scenarios: Are Best and Worst cases still plausible?
Automate Where Possible
Use bank feeds or accounting software integrations to quickly pull actuals. This reduces manual entry.
Common Pitfalls and How to Avoid Them
Be aware of these traps to keep your forecast accurate and useful.
Don't Confuse Profit with Cash
A sale is revenue; collecting payment is cash. Payments and expenses don't always align. The forecast is only about money in/out of your bank.
Ignoring Non-Operating Cash Flows
Include loan repayments, equity infusions, asset sales, and major capital expenditures. They significantly impact cash.
"Set It and Forget It"
A forecast is a living document. Skipping weekly reviews quickly makes it irrelevant.
Over-Reliance on Optimism
Be cautious with your "Most Likely" scenario. Ensure your "Worst Case" is genuinely challenging. Better to be pleasantly surprised.
Free Template Downloads
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Ready-to-Use Templates
I've created proven Excel and Google Sheets templates featuring:
Pre-built formulas and formatting
Three-scenario modeling
Automatic date generation
Collection rate calculators
Visual dashboard with charts
Mobile-friendly layout
Bonus: Industry-Specific Versions
Customized templates for SaaS, retail, professional services, and manufacturing with industry-specific metrics.
When to Get Help
You can build and maintain this yourself. But sometimes, expert guidance helps:
Consider Professional Help When:
Your business has complex revenue models or long sales cycles.
You're planning major investments or expansions.
You're preparing for fundraising or loan applications.
Your forecasts are consistently 20%+ off from actuals.
You need to integrate with complex accounting systems.
As a fractional CFO, I've seen businesses transform their financial health with proper cash flow management. Companies mastering this thrive, make better decisions, and sleep better at night.
What's Next in This Series
This forecast is just the foundation. In the next two articles, we'll build on it:
Part 2: Building a Rolling 12-Month Budget That Actually Works
Part 3: Creating Your Financial Dashboard for Strategic Decision Making
Ready to Master Your Cash Flow?
Don't let cash flow surprises derail your business. In 90 minutes, you can build a system for confidence, clarity, and control over your financial future.
Your business deserves better than flying blind. Your stress levels will thank you. Your investors will be impressed. Your sleep quality will improve.
