A Profit & Loss tells you whether you made money. It does not tell you whether you can make payroll on the 15th. That is the question a cash-flow forecast answers.
Thirteen weeks is one quarter: long enough to see a problem coming, short enough to be accurate. It is the first planning tool we build for most clients, because it turns “I think we are okay” into a number for every week.
What is in it
- Opening cash each week, from the actual bank balance, not the books.
- Expected receipts by week: giving or sales, receivables you expect to collect, grants, other income.
- Expected payments by week: payroll, rent or mortgage, loan payments, vendors, insurance, taxes, one-off items.
- Closing cash each week, and the lowest point in the 13 weeks.
- A line for the cash you are not allowed to touch: restricted funds, reserves, deposits held for others.
How to build it without a finance team
Start with a simple spreadsheet, one column per week. Fill in the fixed payments first; they are the easy part and often the largest. Then add receipts using the last twelve months of actuals as a guide, adjusted for seasonality. Churches see giving swing around holidays and summer. Businesses see their own patterns.
Update it every week, in about fifteen minutes: replace last week’s forecast with the actual, roll the window forward one week, and adjust anything you now know. The value is in the weekly habit, not in getting week thirteen right.
What leadership does with it
The forecast highlights the week where cash is tightest. If that number is comfortable, you can make decisions with confidence: the hire, the repair, the new program. If it is not, you have weeks of warning to adjust timing, collect faster, delay a purchase or draw on reserves deliberately rather than by accident.
It also ends a specific kind of meeting: the one where someone asks “can we afford this?” and nobody knows.
Common mistakes
- Starting from the book balance instead of the bank balance.
- Counting restricted or designated money as available cash.
- Forgetting quarterly and annual items: insurance, property tax, software renewals.
- Building it once and never updating it.
