Updated · Consult EFC
What cash flow forecasting support can include
The scope starts with the question you need to answer. You might need a clearer view of the next payroll cycle, the impact of slow customer payments or the cash required to support a growth plan. A forecast is most useful when its timing and level of detail match that decision.
Build the starting picture
Bring together opening cash, expected customer receipts and planned payments. Identify missing information and distinguish committed amounts from assumptions.
Test the moving parts
Explore the impact of payment delays, changes in sales, supplier timing or additional costs. Show which assumptions cause the biggest change in the projected balance.
Establish a review
Compare forecast cash movements with actual results, explain differences and update the forward view. Agree who supplies information and who follows up on actions.
Support can sit alongside your existing accountant and bookkeeper. Reliable reconciliations and up-to-date receivables and payables information make the forecast easier to use.
| Output | What it should make clear |
|---|---|
| Editable cash model | Opening cash, receipt/payment timing, assumptions and the selected weekly or monthly horizon. |
| Base and alternative scenarios | Which collection, sales, cost or investment assumptions change each outcome. |
| Headroom review | The lowest projected balances, commitments and unresolved funding requirements. |
| Handover and update routine | The person maintaining the inputs, review frequency and treatment of forecast-versus-actual differences. |
These are scope options, not a standard package. Preparation requirements are agreed after reviewing the information available. See the worked 13-week cash forecast guide for the mechanics, or the hiring-cost guide for a decision the forecast can support.
A 13-week cash flow forecast or a monthly forecast?
A weekly forecast can make short-term timing easier to see. A 13-week view is one possible format for looking ahead at receipts and payments over roughly a quarter. A monthly view over a longer period is useful for connecting cash to budgets, seasonality and business plans. The right horizon depends on your situation.
| View | Questions it helps explore | Information needed |
|---|---|---|
| Weekly near-term cash | Which weeks are tight? What happens if an expected receipt moves? | Bank balance, due dates, likely collection dates and scheduled payments. |
| Monthly planning | How do hiring, seasonality and growth affect future cash needs? | Trading assumptions, payment terms, planned costs and investment timing. |
These views can work together. The detailed short-term picture can inform a longer plan, while changes to that plan can be reflected in expected weekly payments.
Why profit and cash flow can tell different stories
Revenue and expenses in management accounts do not always arrive in the bank in the same period. Customer credit terms, stock purchases and the timing of payments can all affect cash even when reported trading performance appears healthy.
ILLUSTRATIVE TIMING EXAMPLE
The sale is agreed. The cash arrives later.
Suppose a business starts with £40,000 in cash. It expects £30,000 of customer receipts and £50,000 of payments during the forecast period. Its forecast closing cash is £20,000. If £15,000 of those receipts moves into the next period, closing cash falls to £5,000, assuming everything else stays the same.
This simplified example illustrates timing only. It is not a client result or a recommended cash buffer.
For more context, read why a profitable business can be short of cash. The purpose is to make the timing visible before it becomes a surprise. A forecast can then be used to discuss collections, spending commitments and the sequence of planned activity.
What information helps build a cash flow forecast?
The initial enquiry does not require documents. Once a scope is agreed, useful inputs may include:
- Opening bank balances and recent reconciled accounts.
- Outstanding customer invoices and expected collection dates.
- Supplier balances and planned payment dates.
- Payroll, rent, subscriptions and other recurring commitments.
- Known tax payments, loan repayments and financing costs.
- Planned hiring, equipment purchases and other business changes.
- Sales assumptions, seasonality and customer payment terms.
Not every input will be certain. Record the source and confidence of key assumptions so that an expected receipt is not mistaken for cash already secured. Where information is incomplete, identifying the gaps is part of defining a useful starting scope.
Working capital and scenario planning
A forecast becomes more useful when it connects to the way your business trades. Receivables, supplier terms, stock and work in progress can explain why sales growth does not immediately create more available cash.
Useful scenarios might include a key customer paying later, a slower sales month or an increase in stock required for a new contract. Change assumptions separately before combining them, so management can see what is driving the result. Keep a record of what changed and why.
For a wider growth decision, financial modelling and funding preparation can connect those cash assumptions to revenue, costs and planned investment. For a regular review with management, consider ongoing finance director support.
Keep the forecast connected to real decisions
Agree an update routine that matches how quickly the business changes. Compare expected receipts and payments with actual movements, investigate material differences and carry the revised assumptions forward.
A useful review ends with ownership: who will confirm a collection date, update a spending commitment or investigate an unexpected movement? The forecast should show the implications, while decisions remain with the people responsible for the business.
If an immediate cash deadline is driving your enquiry, choose urgent finance leadership support on the form and add a phone number if useful. Availability and start dates are agreed individually.
What should a completed cash forecasting engagement hand over?
A model is only part of the deliverable. Agree which opening balances have been reconciled, which receipt dates remain uncertain and who updates each input. Keep existing obligations such as old supplier balances or tax payments visible; starting with a blank forecast can miss cash movements from earlier activity.
A practical handover should demonstrate one update using actual bank movements and a revised collection assumption. The next user should be able to identify the forecast low point, explain what changed and distinguish a confirmed facility from hoped-for funding. Any decisions on payment terms or borrowing still need the relevant authorisation and advice.
- Editable forecast with defined units, dates and assumptions.
- Reconciled opening position and an explicit list of information limits.
- Base and connected downside cases, with unconfirmed actions kept separate.
- Instructions for updating actuals and preserving forecast versions.
- A review agenda and an owner for each collection or commitment action.
Read how to run a weekly cash meeting for a 30-minute agenda and tool-selection checklist. The agenda is a starting point to adapt, not a guaranteed reporting deadline or fixed service package.
Example: a missed receipt changes the next decision
Suppose a hypothetical forecast starts at £40,000, expects £55,000 receipts and £65,000 payments, and therefore closes at £30,000. If £15,000 of receipts slips into the following week, cash instead closes at £15,000, assuming all other movements are unchanged. The business has a timing problem even if the invoice and expected profit remain valid.
The review should identify the specific receipt, obtain evidence for a revised date and test the following weeks. Do not automatically move every missed receipt into the next column or postpone supplier payments without agreement. Record the unmitigated position before proposed actions so the funding exposure remains visible.
For the mechanics, see the worked 13-week cash-flow forecast. For reporting the past alongside the forward view, use the monthly CFO reporting checklist.
Cash flow forecasting: your questions
Can you help build a 13-week cash flow forecast?
A weekly forecast can be included in an agreed cash flow forecasting scope. The horizon, level of detail and review process depend on the decisions you need to make and the available information.
How is a cash flow forecast different from a budget?
A cash flow forecast focuses on when money is expected to enter and leave the bank. A budget sets a financial plan, often including revenue and expenses. They can be connected, but payment timing means the numbers are not interchangeable.
Do I need to change accounting software?
A software change is not a starting requirement. The first step is to understand your current records, reporting process and the information needed for the forecast.
Will a forecast guarantee that cash problems are avoided?
No. A forecast depends on assumptions and can change as trading conditions change. Its purpose is to expose timing, test scenarios and support earlier, better-informed decisions.
A 13-week forecast should show when a decision is needed
For a hypothetical business, £80,000 opening cash plus £120,000 expected receipts less £150,000 expected payments leaves £50,000 before any additional funding or unlisted movements. The weekly timing still matters: a large supplier payment before customers pay could create a shortfall even when the closing balance looks positive.
Separate committed payments from estimates, mark overdue receipts and compare actual movements with the forecast each week. Keep potential funding separate from cash already available. A useful handover identifies the owner of each input, the update day and the trigger for management action.
Questions about this scope
How often should a 13-week cash forecast be updated?
A weekly refresh is a common starting point for short-term cash management. More frequent review may be needed when liquidity is tight or receipts and payments are volatile. Agree a cadence that fits the business.
Should an expected loan be included as available cash?
Show prospective funding separately from confirmed availability and model the outcome if it is delayed or unavailable. Approval, conditions and drawdown timing can change.
More questions about this support
Can you review an existing cash-flow forecast?
A review can be discussed separately from building a new forecast. Agree the model purpose, records available, checks required and whether structural changes or a new model are included.
Which tool should a small finance team use for weekly cash forecasting?
Use a tool the team can maintain with controlled access, traceable inputs, version history and suitable actual-versus-forecast reporting. A structured spreadsheet may suffice; complexity alone is not a reason to buy another system.