Articles · Finance
How to Build a Cash Flow Forecast: Structure, Example and Common Mistakes
A company can be profitable and still run out of cash – when money comes in too late. A cash flow forecast shows weeks in advance when things get tight and gives you time to act.
What is a cash flow forecast?
A cash flow forecast lists all expected receipts and payments by the date the money actually moves – not the invoice date. It answers a single question: how much money is in the account at the end of each week?
Why 13 weeks?
13 weeks is one quarter: long enough to see tax dates, quarterly rent or seasonal gaps, short enough to plan realistically week by week. For the year, add a rough 12-month plan.
Structure in four blocks
- Opening balance: bank balance at the start of the week (including cash).
- Receipts: customer payments by expected payment date, other income, loans.
- Payments: materials and goods, wages, rent, insurance, taxes and VAT, loan repayments.
- Closing balance: becomes next week's opening balance.
Closing balance = opening balance + receipts − payments
Example: the first four weeks
| Item | Week 44 | Week 45 | Week 46 | Week 47 |
|---|---|---|---|---|
| Opening balance | €12,000 | €14,300 | €9,100 | €11,600 |
| Customer receipts | €8,500 | €6,200 | €9,000 | €4,800 |
| Wages | – | – | – | −€7,200 |
| Rent | −€2,400 | – | – | – |
| Materials and goods | −€3,800 | −€4,100 | −€3,500 | −€3,900 |
| VAT payment | – | −€7,300 | – | – |
| Closing balance | €14,300 | €9,100 | €11,600 | €5,300 |
The business is profitable in all four weeks, yet the account drops to €5,300 in week 47. If your minimum cash balance is €6,000, you see the problem now – not on payday.
Set a minimum cash balance
Choose an amount the account should never fall below – for example one month of fixed costs. Every week below that line is flagged. That gives you time to invoice earlier, postpone purchases or talk to the bank.
Five common mistakes
- Planning by invoice date instead of payment date – customers often pay 14 to 30 days later.
- Forgetting VAT: it is included in customer payments but belongs to the tax office.
- Missing irregular payments: insurance, vehicle tax, bonuses, tax prepayments.
- Building the plan once and never updating it – it must roll forward one week every week.
- Not comparing plan with actuals – that is the only way your assumptions get better over time.
Free Excel template
The Cash Flow Planner includes a 13-week forecast and a 12-month plan. Enter receipts and payments; the template calculates the closing balance and flags every week below your minimum cash balance.