Most businesses run on hope and yesterday’s P&L. Cute. The companies that don’t panic on Thursdays run a 13-week cash flow. It’s simple, relentless, and unfairly effective at keeping you solvent while everyone else is guessing.
What It Is
A rolling, weekly forecast of cash in and cash out for the next 13 weeks. Not accrual fantasy land. Real receipts. Real disbursements. Updated every week, without fail.
- Horizon: 13 weeks (one fiscal quarter of breathing room)
- Granularity: Weekly buckets
- Method: Direct cash method (collections, not sales; payments, not expenses)
Why It Works
- Visibility beats anxiety. You see the wall before you hit it.
- Decisions get better. Hiring, inventory buys, loan draws, and distributions are made with eyes open.
- Bankers calm down. A clean 13-week model with a history of accuracy earns trust and better terms.
- Teams align. Sales, ops, and finance argue less when the cash calendar is the referee.
The 7-Line Model (yes, really)
Start small. You can get fancy later.
- Beginning cash
- Customer receipts (collections by customer or segment)
- Loan/other inflows (LOC draws, refunds, tax rebates)
- Payroll + payroll taxes
- AP/Vendors (key suppliers broken out)
- Fixed outflows (rent, debt service, insurance, SaaS)
- One-offs (equipment, tax payments, legal, oh-no surprises)
Ending cash = Beginning cash + inflows − outflows
Building It (One Afternoon, No Excuses)
- Seed weeks 1–3 from reality.
- Pull the AR aging; tag what’s actually collectible this week vs next.
- Drop payroll dates and gross amounts.
- List due-this-week AP and debt service.
- Extend to 13 weeks.
- Collections: use conservative percentages of aging buckets and pipeline.
- AP: enter vendor terms by due date; schedule non-essentials later.
- Fixed items: copy forward with exact dates and amounts.
- Name owners.
- Finance owns the file.
- Sales owns collections promises.
- Ops owns vendor timing.
- CEO owns the “we’re not spending that” veto.
- Lock a weekly meeting.
Same time, same 30 minutes. Update last week’s actuals, adjust the forward 13, and make three decisions: what we collect, what we pay, what we delay.
Rules That Make It Bulletproof
- No optimism without names. A receipt exists only if it has a customer name, amount, and date.
- No stealth spending. If it isn’t in the model, it doesn’t happen.
- Cash before GAAP. If it doesn’t move the bank balance, it’s a footnote.
- Accuracy score. Track forecast vs actual each week. Under- or over-shoot by more than 10% and you fix the inputs, not the cosmetics.
How It Changes Decisions
- Hiring: Approve only if 13 weeks stay above your minimum cash floor after payroll and taxes.
- Inventory: Buy against specific POs, not a mood.
- Vendor terms: Use the model to negotiate: show them dates, offer partials, keep supply lines open.
- Distributions: Only after the cash floor, debt service, and taxes are covered in the forward view.
- Banking: Walk into credit meetings with the last 8 weeks of forecast vs actual plus the current 13-week roll. Adults get adult terms.
Common Failure Modes
- It becomes a spreadsheet art project. Keep it sparse and readable.
- Nobody owns collections dates. Sales must call the shot and log promises.
- It’s not weekly. Skip one week and you’re back to guessing.
- It ignores taxes. Put payroll tax deposits and income tax estimates on the exact weeks they hit.
Quick Starter Template (columns = weeks)
- Row 1: Beginning Cash
- Rows 2–4: Inflows (Receipts by key customer/segment; LOC draws; other)
- Rows 5–9: Outflows (Payroll; Taxes; AP core vendors; Fixed costs; One-offs)
- Row 10: Ending Cash
- Row 11: Minimum Cash Floor (your operating red line)
Download 13-week Cash Flow Template (Excel File Format)
What “Good” Looks Like in 30 Days
- Model exists, is updated weekly, and is accurate within 10%.
- Minimum cash floor defined and respected.
- At least two decisions per week are driven by the model.
- Banker has seen it and stopped breathing down your neck.
Bottom Line
You don’t run a company with last month’s P&L. You run it with a 13-week cash view that tells you what you can afford, when you can afford it, and who needs to pay you first. Install this, and half your “emergencies” vanish. The other half become manageable.