Start with cash that is available now
Record opening cash at the start of week one. Keep the minimum buffer separate: it is the reserve you want the forecast to preserve, not another expense. Record existing borrowing repayments as payments; do not treat an undrawn credit limit as cash already received.
Put receipts in the week you expect customers to pay. Put wages, suppliers, tax, debt and other payments in their expected payment weeks. Keep amounts on a consistent tax basis and avoid counting the same payment in two categories.
Read the low point, not just the final balance
Each week closes at opening cash plus receipts less payments. That closing figure becomes the next week’s opening figure. A healthy balance in week 13 can follow a shortage in week four, so review the entire sequence.
The peak buffer gap is the largest difference between your chosen reserve and a lower modelled balance. Include an opening shortfall. A zero gap only describes the dates and cash movements entered; a weekly model can miss a payment due before a receipt within the same week.
Separate a timing problem from a recurring deficit
First run the forecast using your current collection assumptions. Then delay receipts while holding payments fixed. Compare when the buffer is breached, how deep the shortfall becomes and whether cash subsequently recovers.
A gap that closes after identifiable collections creates different questions from a balance that keeps falling. For a persistent deficit, revisit the underlying receipts and costs before assuming additional borrowing solves it. If considering finance, add its actual fees and repayment dates to a separate scenario.
Keep receipts beyond the horizon visible
The planner shifts receipts by whole weeks. Amounts moved beyond week 13 are reported as deferred receipts; they are not deleted or included in the current closing balance. Extend the forecast before relying on those collections to meet later commitments.
Update the model as actual cash movements become known. Move the horizon forward, explain large differences and check whether an expected payment date still has evidence behind it.
What to prepare
- Reconcile opening cash to current records.
- List payment dates and avoid duplicate costs.
- Choose and explain the minimum reserve.
- Run the original and delayed receipt scenarios.
- Record a practical action before the first breach.
Common questions
Why use 13 weeks?
It is a practical planning window for this tool, not a statutory requirement. Use a longer forecast when the business cycle or commitments extend further.
Is the peak gap the amount I should borrow?
It is an estimate from the entered cash schedule. The right response also depends on collection changes, available cash, financing costs and the ability to make repayments.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.