How to build a 13-week cash flow forecast

Annual budgets are useful for planning, but they do not tell you whether you can pay wages in three weeks. A 13-week cash flow forecast does. It is the tool lenders, turnaround advisers and well-run businesses use to see trouble coming early enough to do something about it.

What it looks like

A simple spreadsheet with 13 columns, one per week, and rows for:

• Opening balance (week one is today’s bank balance).
• Money in: customer receipts, other income.
• Money out: wages, super, PAYG, rent, suppliers, loan repayments, GST, insurance, drawings.
• Net movement: money in minus money out.
• Closing balance: opening balance plus net movement, which becomes next week’s opening balance.

The row that matters most is the closing balance. Any week where it dips below the minimum you are comfortable with is a week to plan for now.

Step by step

1. Start with today’s balance across all business accounts.
2. List money in: go through your debtors and estimate when each will actually pay, not when the invoice says. Add expected cash sales based on recent weeks.
3. List fixed outflows: wages and super on pay days, rent, loan repayments, subscriptions.
4. Add variable outflows: supplier payments based on due dates, stock purchases, fuel.
5. Drop in the lumps: BAS, PAYG instalments, insurance, registration.
6. Calculate closing balances and highlight any week below your minimum.

Weighing it up? You can check your eligibility without any credit check, then decide in your own time whether to go further.

An illustrative example

Week	Opening	In	Out	Closing
1	$62,000	$38,000	$41,000	$59,000
2	$59,000	$35,000	$44,000	$50,000
3	$50,000	$31,000	$40,000	$41,000
4	$41,000	$36,000	$63,000 (incl. BAS)	$14,000
5	$14,000	$40,000	$42,000	$12,000

This business looks fine on average but dips to $12,000 in week five. If its minimum is $25,000, it now knows five weeks ahead that it needs to bring forward collections, push a supplier payment or draw on a facility.

Keep it alive

A forecast is only useful if it is updated. Each week:

• Replace last week’s forecast with actual figures.
• Add a new week at the end so you always see 13 weeks ahead.
• Note why actuals differed from the forecast, which improves the next one.

This takes about 30 minutes once it is set up.

Using the forecast to fund smarter

The forecast tells you three things a lender will ask: how much you need, when you need it and how it will be repaid. A gap that appears once in week four and closes by week eight suits a short draw on a line of credit. A gap that keeps growing week after week points to a deeper problem that funding alone will not solve. Pair the forecast with the cash runway calculator for a quick sense check.

Common mistakes

• Using invoice due dates instead of realistic payment dates.
• Forgetting GST and PAYG in the BAS week.
• Leaving out owner drawings.
• Not updating it after the first month.

For the BAS side of the forecast, see our guide to BAS quarter cash planning.

Testing scenarios

Once the basic forecast works, copy it and change one thing at a time. What if your largest customer pays three weeks late? What if sales drop 15% for a month? What if you take on the new contract you are quoting? Each version shows how much room the business has before the balance crosses your minimum. Scenarios turn the forecast from a record of what you expect into a tool for deciding what to do, such as how big a standby facility should be, or whether to delay a purchase until after the BAS.

Where to go from here

• How to calculate your business cash runway: Cash runway tells you how many weeks your business can keep paying its bills. How to calculate it, what to include and how to extend it before it runs out.
• BAS quarter cash planning: A practical routine for planning cash around your quarterly BAS: separating GST and PAYG, forecasting the bill and avoiding last-minute shortfalls.
• Business line of credit: A business line of credit gives you a limit to draw on and repay as cash flow moves. How it works, what it costs in practice and who it suits best.
• How much working capital does a business need?: How to work out how much working capital your business needs, using debtor, stock and supplier days, plus a buffer for surprises and growth.

Terms used in this guide

• Line of credit: an approved limit the business can draw, repay and draw again, usually paying interest only on the drawn balance.
• Working capital: the cash a business needs to keep running while money is tied up in stock and unpaid invoices.
• BAS: the business activity statement used to report and pay GST, PAYG withholding and other amounts to the ATO.
• PAYG withholding: tax withheld from wages and other payments, which the business passes on to the ATO.

Five things to confirm with any lender

• How much lands in my account after any fees are deducted?
• What is the total repayable, and over what period?
• Is the repayment schedule weekly, fortnightly or monthly?
• What property or assets will be secured?
• What are my options if trading dips during the term?

Advice worth getting

Your accountant knows your numbers better than anyone, so involve them early. They can confirm figures for the enquiry, flag tax effects of different structures, and tell you whether the timing of a loan suits your BAS and tax cycle. A lender’s job is to assess whether funding fits; your accountant’s job is to make sure the business is set up to carry it well. The two work best together.

Key takeaways

• Thirteen weeks covers a full quarter including BAS
• Start from today’s real bank balance
• Update weekly with actual figures
• Use it to arrange funding before the gap, not during it

How we work through it with you

We keep it simple. Your enquiry goes to one team. That team calls you, confirms the details, asks for bank statements or property details and tells you honestly what looks achievable. If the right answer is a payment plan, a conversation with a supplier or waiting a quarter, we will say so. If funding fits, you get the amount, term, repayments and total cost spelled out before you sign anything. You will always know who is handling your file and how to reach them.

Funding or another fix?

Ask yourself where the repayment will come from. A customer payment, the next peak season, a property sale or steady trading are all real sources. Hope is not. If you can point to the money that will clear the loan, and roughly when, funding is likely to help. If you cannot, talk to your accountant about the underlying numbers first.

Getting your details together

A short checklist before you send the enquiry. None of it takes long, and together it heads off the most common causes of delay:

• Know the amount you need and what it will pay for.
• Check your recent bank statements so nothing in them surprises you.
• Note any loans, leases or payment plans the business is carrying.
• If you own property, know who is on the title and what is owed.
• Make sure every director or co-owner knows you are applying.

About the questions we ask

The enquiry asks for the amount, the purpose, how long you have traded, your monthly revenue, your credit history, your state and whether you own real estate. Each answer steers your enquiry towards the right option. Accurate answers let the first call move straight to solutions. Rounded-up turnover or a credit history that turns out to be different from the form means starting again, which costs everyone time.

Talk to a real person

If funding could help, let us know the details. Enquiring runs no credit check, your information stays with one team, and a real person will talk you through what fits. Please answer each question honestly and precisely, particularly the amount, turnover and whether you own real estate, so we can match you properly from the start.