What is a 13-week cash-flow forecast?
A 13-week cash-flow forecast is a financial planning tool that estimates how much cash your business will have available over the next three months.
It helps you answer four important questions:
- How much money do we have today?
- How much money is expected to come in?
- How much money must we pay out?
- Will we have enough cash to meet our obligations?
Unlike a profit-and-loss statement, a cash-flow forecast focuses on when money is actually expected to move.
Why should a business forecast 13 weeks ahead?
A 13-week period gives business owners enough visibility to identify upcoming cash shortages while keeping the forecast manageable.
For example, a business might discover that:
- A major customer will only pay in six weeks.
- Supplier payments are due next week.
- Salaries must be paid at the end of the month.
- VAT or other tax obligations are approaching.
- A large stock purchase is required before the next sales cycle.
Without a forecast, these obligations may come as surprises.
How to build your forecast
Step 1: Record your opening cash balance
Start with the actual available business cash at the beginning of the first week.
Do not include money that customers owe you as if it is already in the bank.
Step 2: Estimate money coming in
Include payments you reasonably expect to receive.
Examples:
- Customer invoice payments.
- Cash sales.
- Card sales.
- Deposits from customers.
- Contract milestone payments.
- Other confirmed business income.
Use realistic collection dates. If a customer normally pays 15 days late, do not automatically assume payment will arrive on the contractual due date.
Step 3: Estimate money going out
Include all expected cash payments.
Examples:
- Employee salaries.
- Rent.
- Electricity and water.
- Supplier payments.
- Stock purchases.
- Transport and fuel.
- Insurance.
- Loan repayments.
- SARS payments.
- Equipment maintenance.
- Software subscriptions.
Step 4: Calculate your closing balance
Use this formula:
Opening cash + Money received − Money paid = Closing cash.
The closing balance becomes the opening balance for the following week.
Copy-and-paste 13-week forecast template
| Cash-flow item | Week 1 | Week 2 | Week 3 | Week 4 |
|---|---|---|---|---|
| Opening balance | R | R | R | R |
| Customer payments | R | R | R | R |
| Cash sales | R | R | R | R |
| Other income | R | R | R | R |
| Total money in | R | R | R | R |
| Supplier payments | R | R | R | R |
| Salaries | R | R | R | R |
| Rent and utilities | R | R | R | R |
| Transport and fuel | R | R | R | R |
| Loan repayments | R | R | R | R |
| Tax payments | R | R | R | R |
| Other expenses | R | R | R | R |
| Total money out | R | R | R | R |
| Closing balance | R | R | R | R |
Repeat the same columns until Week 13. This is a simplified template; add categories relevant to your business.
Worked example
A service business begins Week 1 with R84,000 in its bank account.
It expects R42,000 in customer payments and R38,500 in payments to suppliers and other expenses.
| Description | Amount |
|---|---|
| Opening cash balance | R84,000 |
| Customer payments | R42,000 |
| Total money available | R126,000 |
| Payments and expenses | R38,500 |
| Closing cash balance | R87,500 |
The business has R87,500 remaining after the week’s transactions.
However, it must still consider the following week’s expected payments before deciding how much money can safely be spent.
How to handle uncertain payments
Not every customer pays on time. Do not build your entire forecast around optimistic assumptions.
Separate incoming payments into three categories:
- Confirmed: The customer has confirmed the payment date.
- Expected: The invoice is due, but payment has not been confirmed.
- Uncertain: Payment is overdue, disputed or dependent on another event.
For important decisions, create a conservative forecast that excludes uncertain receipts until there is stronger evidence that the money will arrive.
Common cash-flow forecasting mistakes
Mistake 1: Treating invoices as cash
An invoice is a claim for payment. It is not money in your bank account.
Mistake 2: Forgetting annual expenses
Insurance renewals, licence fees, equipment servicing and annual compliance costs can create unexpected pressure.
Mistake 3: Ignoring VAT and tax obligations
Money collected on behalf of SARS should not automatically be treated as money available for general spending.
Mistake 4: Updating the forecast only when there is a problem
A forecast should be updated every week, even when the business is doing well.
Mistake 5: Using unrealistic customer payment dates
Use actual customer payment behaviour rather than relying only on the invoice terms.
Frequently asked questions
No. A spreadsheet is sufficient to start. Accounting software can make the process easier as the business grows.
You can include forecast sales, but distinguish them from confirmed orders and expected customer payments. Avoid relying on speculative sales to cover committed expenses.
Identify which week the shortage occurs, then investigate options such as collecting outstanding invoices, negotiating supplier terms, reducing discretionary expenses or arranging suitable finance.
Weekly is a practical minimum. Update it more frequently if the business has volatile sales or significant daily transactions.
Do I need accounting software?
Should I include sales that have not happened yet?
What if my forecast shows a negative balance?
How often should I update the forecast?
Your next action
Create your first 13-week forecast using your current bank balance, confirmed customer payments and known expenses. Update it every Monday and compare the previous week’s forecast with actual results.