A profitable business can still run out of money.
That’s because profit and cash flow are not the same thing. Profit shows what your business has earned after costs. Cash flow shows what’s actually in your bank account, and when money is due to arrive or leave.
For many UK small businesses, a simple cash flow forecast is one of the best ways to spot pressure early and avoid surprises.
In this guide, we’ll show you how to build a practical 13-week cash flow forecast you can update each week.
Why cash flow matters more than profit in the short term
You may have a profitable month on paper and still not have enough cash to cover this week’s wages, rent or supplier payments.
That usually comes down to timing. Customers may pay late, VAT or PAYE may fall due at the same time as payroll, or a larger annual bill may land in a quieter month.
A cash flow forecast gives you an early warning. It helps you see what’s expected to come in, what needs to go out and whether your bank balance is likely to stay comfortable.
It’s not about predicting everything perfectly. It’s about making better decisions with the information you have now.
What is a 13-week cash flow forecast?
A 13-week cash flow forecast is a rolling weekly plan showing:
- your opening bank balance
- expected receipts
- expected payments
- net cash movement
- projected closing bank balance
It focuses on when money is expected to hit or leave your bank account, not simply when an invoice is raised or a cost is recorded.
Why 13 weeks?
Thirteen weeks gives you roughly three months of visibility. That’s usually enough to see upcoming VAT, PAYE, payroll, rent, supplier payments and any larger one-off costs.
It’s also short enough to keep the figures realistic. The best approach is to keep it rolling — each week, compare the forecast to what actually happened, update the numbers and add a new Week 14.
How to build your 13-week forecast
You can build this in Excel, Google Sheets or your accounting software. Set up 13 columns, one for each week, then work through these four steps.
1. Start with your cleared bank balance
Use the actual cleared balance in your bank account on the day the forecast starts.
Don’t rely only on your software balance if transactions are still unreconciled. Check for items that haven’t fully cleared yet, such as Direct Debits, card payments, transfers or anything sitting in a reserve account.
Your first opening balance is the starting point. After that, each week begins with the previous week’s closing balance.
2. Add expected receipts
List the money you realistically expect to receive in each week.
This will usually include customer payments, card settlements, Direct Debit collections, refunds and any other confirmed receipts.
The key word is realistically. If a customer usually pays late, use the later date. If income is only possible rather than confirmed, keep it out of the main forecast or show it separately as an upside scenario.
If you’re VAT-registered, customer receipts will often include VAT. Show the gross amount coming into the bank, then include the VAT payment separately when it falls due.
3. Add expected payments
Next, list what you expect to pay each week.
Keep this practical and grouped. For most businesses, that will include:
- payroll costs and related HMRC payments
- supplier payments, stock and subcontractors
- overheads such as rent, utilities, software, insurance and loan repayments
- tax payments and one-off costs, such as VAT, repairs or annual renewals
Use the date the money is expected to leave your bank account.
For example, wages may leave at month end, while PAYE is usually paid to HMRC later. HMRC’s usual deadline for monthly PAYE payments is the 22nd of the following tax month when paying electronically. Check the latest details on GOV.UK and use your actual payment date in the forecast.
VAT deadlines vary depending on your VAT period and scheme. Most businesses pay one calendar month and seven days after the end of the VAT period, but you should always check the date shown in your VAT account. Further guidance is available on GOV.UK.
4. Calculate the weekly closing balance
For each week, use this formula:
Closing balance = Opening balance + Total receipts − Total payments
Then carry the closing balance into the next week as its opening balance.
It also helps to set a minimum cash buffer. That could be one payroll run, a month of fixed costs or another amount that feels sensible for your business.
A simple worked example
Imagine a limited company starts Week 1 with £18,000 in cleared cash. It wants to keep at least £10,000 available as a working buffer.
| Week 1 | Week 2 | Week 3 | Week 4 | Week 5 | Week 6 | |
|---|---|---|---|---|---|---|
| Opening balance | £18,000 | £14,500 | £13,000 | £8,500 | £10,500 | £9,500 |
| Customer receipts | £22,000 | £16,000 | £12,000 | £27,000 | £18,000 | £10,000 |
| Total payments | (£25,500) | (£17,500) | (£16,500) | (£25,000) | (£20,500) | (£15,000) |
| Net cash movement | (£3,500) | (£1,500) | (£4,500) | £2,000 | (£2,500) | (£5,000) |
| Closing balance | £14,500 | £13,000 | £8,500 | £10,500 | £9,500 | £4,500 |
| Compared with £10,000 buffer | £4,500 above | £3,000 above | £1,500 below | £500 above | £500 below | £5,500 below |
The business is not technically overdrawn, but it falls below its preferred buffer in Week 3. Week 6 is the most serious pressure point, when VAT and supplier payments coincide with lower receipts.
That gives the business time to act. It might:
- Chase overdue customer invoices.
- Ask for deposits or staged payments on new work.
- Review whether non-essential spending can move.
- Speak to suppliers about payment timing.
- Delay optional equipment purchases.
- Review agreed funding options before the situation becomes urgent.
The figures above are illustrative. Your actual VAT, PAYE, loan and supplier dates should always be used.
What to do when a week goes negative
A negative projected week is a warning, not a reason to panic. The earlier you spot it, the more choices you have.
First, check the forecast is accurate. Have you included every committed payment? Are receipts based on realistic payment behaviour? Have you used the correct VAT or PAYE dates?
Then take action. In most cases, your options are to:
- Bring money in sooner — chase overdue invoices, invoice promptly and ask for deposits where appropriate.
- Review payment timing — speak to key suppliers before a payment is missed.
- Delay non-essential spending — separate must-pay costs from purchases that can wait.
- Look at funding early — a suitable finance option or agreed facility is easier to arrange before things become urgent.
Never hide a committed payment just to make the forecast look better. A useful forecast tells you the truth.
Common cash flow forecasting mistakes
A few mistakes come up again and again:
- Assuming every customer pays on time — use actual payment behaviour where you can.
- Confusing invoices with cash — a sale is not cash until the money reaches your account.
- Forgetting VAT, PAYE or one-off costs — these are often what create the squeeze.
- Failing to update the forecast — if it isn’t refreshed regularly, it quickly becomes less useful.
As a simple weekly routine, reconcile the bank balance, compare last week’s forecast to what actually happened, update receipt dates, add any new committed costs and check the lowest projected balance before adding a new week at the end.
How bookkeeping and forecasting work together
A cash flow forecast is only as reliable as the information behind it. Up-to-date bookkeeping helps you see which invoices are overdue, what you owe suppliers and which tax payments are approaching.
Our full bookkeeping service covers day-to-day records, bank reconciliations, VAT information and regular financial reporting. That gives you a clearer starting point for cash flow forecasting without having to spend your evenings sorting through transactions.
For businesses that need more strategic support, our Virtual Finance Director service can help with forecasting, budgeting, cash flow reviews and business decisions. It’s flexible support without the cost of employing a full-time Finance Director.
If you’d like to talk through your current position, you can book a free initial meeting. There’s no obligation, no jargon and no pressure, just a straightforward conversation about what would help.
Frequently asked questions
How often should I update a 13-week cash flow forecast?
At least weekly. Compare the previous forecast to what actually happened, update the figures and add a new week at the end.
If cash is tight, you may want to check it more often for a short period.
Is Excel enough for cash flow forecasting?
Yes. For many small businesses, a clear Excel or Google Sheets forecast is more than enough.
Keep it simple, label each week clearly and use formulas rather than typing closing balances manually. As the business grows, software or extra support may make the process easier.
What if my forecast shows a shortfall?
Check the figures first, then act early. Review collections, payment dates, discretionary spending and funding options.
The aim isn’t to make every week look comfortable. It’s to give you enough notice to make calm, informed decisions.