A Weekly Cash Forecast You Can Keep Up With

Short Answer: Start with today's bank balance. For each of the next several weeks, list the money you expect in, by the date customers will actually pay, and the money going out, by the date each bill, payroll or loan payment leaves the account. The running balance shows your lowest point before you get there. Once a week, replace last week's guesses with what happened and add a new week at the end.

A monthly budget answers whether the month works. It doesn't say whether Thursday works. Payroll goes out every week or two, customers pay on their own schedule, and a big purchase lands on one day. Inside a month that ends fine, there can be a week where the account is nearly empty. A weekly forecast is how you see that week in advance.

What Is a Cash Flow Forecast?

A cash flow forecast is a list of the money you expect to come into and go out of your bank account, by date, with a running balance. It differs from a profit and loss statement in one way that matters: it follows the date money moves, not the date work is done. An invoice sent today on 30-day terms is cash in a month from now (see Profit Is Not Cash for why the two drift apart).

How Do I Build One?

1. Start from today's bank balance. The real number from the bank, not from your books.
2. List money in, by the week it will arrive. Use each customer's actual habits. If a client on 30-day terms usually pays in 40, put their check in week six.
3. List money out, by the week it leaves. Payroll on pay dates, supplier bills on their due dates, loan payments, insurance, your own draw, and any planned purchase.
4. Run the balance. Each week's ending balance is the start plus money in minus money out.
5. Mark your floor. Pick the lowest balance you'll accept, such as next week's payroll, and flag any week that falls below it.

A spreadsheet with one row per week is enough. Six to eight weeks covers most decisions in a small business; many finance teams keep 13 weeks, a full quarter, once the habit is set.

A Worked Example: Six Weeks of Spring

Take a hypothetical landscaping company, Greenline Landscaping, with about $520,000 a year in revenue. Residential clients pay on completion; commercial clients pay 30 days after the invoice. The owner builds a forecast at the end of March, with $30,000 in the bank. April is the first full month of the season: the crew goes back to full hours, materials are bought, and the company plans to buy a $7,000 commercial mower in the second week.

What's inside the lines:

• Money in, April: residential payments growing from $3,000 to $7,000 a week as the season picks up ($20,000 in the month), plus $9,000 from March's commercial invoices, all arriving in the first two weeks. April's own commercial invoices, $28,000, don't arrive until May.
• Money out, April: crew payroll of $4,000 to $6,000 a week ($20,000), materials ($16,000, including $4,000 of mulch and plants for May), fuel, insurance and other costs ($6,000), the mower ($7,000), truck-loan principal ($1,500) and two owner draws of $2,000.
• May: April's commercial checks start arriving, about $6,000 and then $8,000 a week, while the crew costs $6,000 to $6,500 a week.

April's four weeks add up to exactly the month Greenline had: $29,000 in, $54,500 out, $30,000 down to $4,500. The monthly view says the company ended April with a small positive balance. The weekly view says something sharper: from the last week of April through the middle of May, the account holds less than one week of crew payroll. One commercial client paying a week late means a missed payroll.

What Would the Owner Change?

Seen at the end of March, the problem has easy fixes. Moving the mower purchase to the third week of May, when commercial checks are arriving, lifts every balance from the second week of April by $7,000. The lowest point becomes $11,500 instead of $4,500, nearly two weeks of payroll. Other options show up in the same table: buy May's mulch in May, skip one owner draw in April and take it in May, or ask the largest commercial client to pay on 15-day terms.

None of these decisions changes Greenline's profit. All of them change whether the company gets through the spring without borrowing.

How Do I Keep It Up Every Week?

The forecast only helps if it stays current. A routine that takes about half an hour:

1. Each Monday, replace last week's forecast with what actually came in and went out.
2. Note any number that missed by more than a few hundred dollars and why: a late client, a bill you forgot, a job that moved.
3. Update the coming weeks with what you just learned, especially customer payment dates.
4. Add one new week at the end so the forecast always looks the same distance ahead.

After a month or two, the misses get small, because the forecast is built from your actual payment patterns rather than your terms.

What to Look For

• The lowest ending balance in the forecast, against your floor. If any week falls below next week's payroll, act now, while there are still weeks to move things.
• Forecast misses on money in. When collections keep coming in below forecast, customers are slowing down. Chase them before the gap compounds.
• Big one-day payments. Equipment, insurance renewals and tax payments are the lines most likely to create a low week. Put each one in the week that hurts least.

What a Finance Consultant Would Do Next

A consultant looking at Greenline's forecast would move the mower, check which commercial clients reliably pay late and adjust their dates, and then look past May: whether the spring squeeze repeats every year, and how much cash the company should hold going into April so it doesn't depend on moving purchases around.

That longer view is what Occam's Model runs on your own books. It traces your profit through to cash, projects your cash month by month (with the busy and slow months you shape in yourself) so you can see how long it lasts, and lets you test a change in how fast customers pay or when you pay suppliers before you make it. When you need extra help, an expert can review it with you.

Common Questions

How far ahead should a cash flow forecast go?
Six to eight weeks is enough to start in most small businesses, and covers the next payroll squeeze. Many finance teams extend to 13 weeks once the weekly routine is in place.

What's the difference between a cash flow forecast and a budget?
A budget plans revenue and costs by month, when the work is done. A cash forecast follows the date money actually moves, which is what decides whether you can pay a bill on a given day.

How accurate does a weekly cash forecast need to be?
Accurate enough to show the low weeks. It'll miss by a few hundred dollars most weeks; what matters is catching the week where the balance falls under your floor.

What should I do if the forecast shows a shortfall?
Move what you can: delay a purchase, bring collections forward, shift an owner draw. If the gap remains, arrange a line of credit before the week arrives, not during it.