Build a Thirteen-Week Cash Forecast You Can Act On

The sales report looks healthy, but a major customer pays three weeks late. Payroll and supplier bills still arrive on schedule. The problem is timing, and a monthly profit figure does not show exactly when it becomes urgent.

A short-term cash forecast puts expected receipts and payments into dated periods so the business can see where it may need to act. AI can help organize the evidence and explain scenarios. The arithmetic and source records need to remain visible and checkable.

Your work product is a thirteen-week forecast, a delayed-collection scenario, and a short action memo. Cedar Desk Studio's balances, invoices, dates, and payment schedules are fictional teaching inputs. No bank account was accessed and no payment or financing was authorized.

Define the entity, cash, and time period

Start with one business or clearly defined group of accounts. Do not quietly combine household funds, company cash, restricted donations, or another organization's bank balance. Document which funds are actually available for the obligations in this forecast.

For a real forecast, reconcile the opening position to bank and accounting records, including known outstanding items. Avoid subtracting an outstanding payment twice: once in an adjusted opening balance and again as a future outflow. Keep restricted balances and unavailable credit separate from usable cash.

The practice forecast assumes $10,000 available at the beginning of week one, September 14, 2026. That is a supplied hypothetical opening balance, not a verified bank balance. The thirteen weekly periods end on December 13.

A thirteen-week horizon provides a practical short-term view, but it is not exactly ninety days and does not replace longer-term planning. BDC recommends a rolling thirteen-week forecast updated weekly to improve near-term visibility. See its cash-flow planning guidance.

Build from receipts and payments

Use the date cash is expected to move, not simply the date an invoice was issued. Keep the basis for that timing beside the amount.

Revenue and collections can fall in different periods. Loan proceeds are cash receipts but are not sales revenue. Repaying loan principal uses cash without becoming an operating expense in the same way as a supplier charge. The SEC's financial statement guide explains the distinction between earnings and cash movements, including investing and financing activities.

Keep each receipt or payment in the schedule once. An invoice already included in an accounts-receivable collection plan should not also appear as a new sales receipt. A credit-card purchase and the later card payment need a consistent cash-account treatment to avoid duplicate outflows.

Separate source facts from forecast choices

An invoice due on a date does not guarantee collection on that date. Label the expected receipt as a forecast and state why it is reasonable. An overdue balance with no response from the customer deserves a different scenario from a documented upcoming settlement.

For the constructed example, regular receipts are $3,000 per week. Three separate $2,000 receivable collections are scheduled in weeks three, seven, and eleven. They are excluded from the regular receipts to prevent double counting.

Regular weekly payments total $3,500: $1,500 payroll, $1,000 suppliers, and $1,000 other operating payments. Additional scheduled obligations of $1,000 occur in weeks two, six, nine, and twelve. A discretionary $3,000 equipment purchase is proposed for week four and has not been ordered.

The supporting practice files identify the extra obligations and source IDs. All are fictional amounts; the tax-payment examples are supplied inputs, not calculated tax advice. Unlisted items must be investigated before anyone uses such a simplified forecast for a real business.

Calculate one week and roll it forward

The basic relationship is:

Closing cash = opening cash + receipts − payments.

Each week's closing cash becomes the next week's opening cash. The practice pack produces this base scenario:

Receipts total $45,000 and payments total $52,500. The opening $10,000 therefore becomes $2,500 at the end. This is a projected cash decline, not a calculation of accounting loss.

Check the horizon totals against the opening-to-closing change, then inspect each weekly roll-forward. A forecast can have the right final total and still put an important receipt in the wrong week.

Look at the lowest point and the operating floor

For this exercise, Cedar proposes a $4,000 minimum cash floor. That is a planning threshold, not a universal requirement or an established policy for Randy's business.

The base forecast first falls below that floor in week nine. Its lowest projected week-end balance is $2,500, a $1,500 shortfall against the floor. The balance is still positive; a floor shortfall is not automatically an inability to pay a particular bill. It is a signal to examine timing and exposure before the buffer disappears.

Week-end balances can hide an earlier daily low. If payroll leaves Monday and collections arrive Friday, a weekly table may overstate the cash available when payroll is due. Add daily detail for tight periods and keep payment sequencing realistic.

Stress a collection date without inventing a new sale

The delayed-collection scenario moves the $2,000 receipt from week three to week six. It does not delete the receipt and does not add another copy in week six.

Compared with the base scenario, closing cash is $2,000 lower in weeks three, four, and five. Week five ends at $3,500, so the first floor breach moves forward from week nine to week five. Once the receipt arrives in week six, the paths rejoin. The ending balance remains $2,500.

The same ending cash can therefore conceal a different operational risk. Ask whether a customer delay creates an earlier funding need, not just whether the quarter still ends positive.

A separate mitigation scenario removes the uncommitted $3,000 equipment purchase from the base forecast. Ending cash becomes $5,500, and no week-end balance falls below $4,000. This illustrates a proposed decision, not permission to cancel an existing contract or move a required payment. It also does not eliminate the need for that equipment later.

Ask AI to prepare the decision memo

Review the supplied cash schedule and calculated scenarios.
Use source IDs to identify the receipts and payments driving the low points.
Separate contractual dates, forecast timing, and proposed management actions.

Explain the first floor breach, lowest cash, and sensitivity to delayed
collections. Flag double counting, unknown dates, unsupported assumptions,
and any difference between weekly and daily liquidity.
Do not add financing, shift obligations, invent collections, or approve
payments. Present proposed actions with their owner and missing evidence.

A useful memo for this fixture would identify the approaching floor breach, the sensitivity to the first large collection, and the proposed equipment decision. It would not recommend silently paying taxes or staff late to make the table balance.

Possible real actions include verifying collection dates, correcting billing problems, reviewing uncommitted spending, or discussing options with an appropriate adviser or lender early. Record agreements before incorporating changed terms or financing into the committed view.

Compare actuals without rewriting history

At the weekly review, preserve the forecast that existed before the week began. Replace the completed week with reconciled actuals in a new working version, explain material differences, and add another week at the end.

Define the sign of each variance. If week-one receipts were $2,700 rather than the forecast $3,000, receipt variance is negative $300 using actual minus forecast. If payments were $3,600 rather than $3,500, payment variance is positive $100, an unfavorable cash effect. Closing cash would be $9,100, or $400 below forecast.

These actuals are also constructed practice figures. A real review needs to explain whether the gap is timing, a changed amount, an omitted item, or an error in the underlying records. The explanation should lead to a specific update, not a vague claim that the model was optimistic.

Assign one owner to maintaining the forecast and appropriate reviewers to its source records. Keep unresolved items visible. The value of the forecast comes from using it to make timely, documented decisions as conditions change.

Next: Improve the reliability of the invoice and expense records feeding financial work in Chapter 28.