How To Build And Update a 13 Week Cash Flow Forecast For Your Business

How to Build and Use a 13-Week Cash Flow Model

Planning for your business’s future starts with knowing how much cash you’ll have and when you’ll have it. One of the best tools for doing this is a 13-week cash flow model, which we introduced as a financial modelling tool in a separate blog about What Is A 13 Week Cash Flow Model. 

A 13 Week Cash Flow Model is a simple but powerful way to forecast your cash inflows and outflows over the next three months, so you can anticipate any potential cash shortages or surpluses. Whether you're running a small online store, a CPG brand, or any type of business, building a solid cash flow model can help you plan ahead and make informed financial decisions.

So, let’s dive into how you build one, what it should include, and how to keep it updated.

How Do You Build a 13-Week Cash Flow Model?

Building a 13-week cash flow model is easier than it sounds, especially if you’re familiar with spreadsheets like Google Sheets or Excel. 

Here are the steps to get started:

1. Set up your spreadsheet: Most businesses build a cash flow model in a spreadsheet because it’s flexible and easy to customize. To start, create a table that lists each of the 13 weeks in one row across the top. Then down the left hand side, you’ll create headers for different categories like cash inflows, cash outflows, and net cash flow.
2. List your cash inflows: This is where you input all the money you expect to receive each week. For example, in an eCommerce business, this could include revenue from sales, customer payments, or even loans or investments. Make sure to break these inflows down by week so you can see exactly when the cash will hit your account. We like to also separate them into the three different categories of cash flows; Operating, Investing and Financing. 
3. List your cash outflows: Next, list all your expected expenses, or outflows. This might include rent, payroll, inventory purchases, marketing costs, and other operating expenses. Just like with inflows, break these out by week to create an accurate forecast.
4. Calculate net cash flow: For each week, subtract your total outflows from your total inflows. This will give you your net cash flow for the week. A positive number means you’re expecting to have more cash coming in than going out, while a negative number means you might face a shortfall.
5. Calculate the week-ending cash balances: The last calculation you need to perform is to calculate your week-ending cash balances. They look like this: Week 1 opening balance + Week 1 inflows - Week 1 outflows = Week 1 ending balance = Week 2 opening balance. 
6. Review your forecast: Once you’ve set up your model, take a look at the next 13 weeks. Are there weeks where you’re projected to run out of cash? If so, now’s the time to adjust your plan, whether that’s cutting back on expenses or finding ways to bring in more revenue.

That’s the basic structure of a 13-week cash flow model. And don’t worry—there are plenty of templates out there if you’re new to Excel or want a head start.

You can see an example of a 13 week cash flow model above, and if you’d like to download a free copy of our template you can do so below.

What Are the Sections a 13-Week Cash Flow Model Should Have?

A strong 13-week cash flow model is broken down into a few essential sections. Here’s what each section should include:

1. Cash Inflows: This section lists all the money you expect to come into your business, such as sales revenue, loan proceeds, or other income sources.
2. Cash Outflows: This section covers all of your expenses, including fixed costs like rent and variable costs like inventory purchases or shipping fees.
3. Net Cash Flow: In this section, you’ll see the difference between inflows and outflows for each week, which will help you identify whether you’re running a surplus or facing a deficit.
4. Opening and Closing Cash Balances: A good cash flow model will also show your cash balance at the start of each week (opening cash balance) and how much you’ll have left at the end (closing cash balance). The closing balance for one week becomes the opening balance for the next week.

By breaking down the model into these sections, you’ll have a clear, week-by-week picture of your financial future.

How to Update Your 13 Week Cash Flow Model

Once you’ve built your model, keeping it updated is critical. A cash flow forecast is only useful if it reflects your actual financial situation, and that requires regular updates. Here’s how to keep your model current:

1. Input historical data: One of the best ways to update your model is by using actual data from your bank feed. Most accounting software will let you classify transactions from your bank account, which can then be used to update your inflows and outflows in the model. This historical information helps ensure that your future forecasts are based on accurate data.
2. Review and adjust projections: After each week, compare your actual cash inflows and outflows to the forecast. Were your predictions accurate? If not, adjust your future forecasts accordingly. This will keep your model as accurate as possible.
3. Rolling forward: A key feature of the 13-week cash flow model is that it “rolls forward.” Every week, you’ll drop the oldest week off the forecast and add a new week. This ensures that you’re always looking 13 weeks ahead, so there are no surprises.

What Can a 13-Week Cash Flow Model Help With?

Now that you’ve built and updated your model, how does it help your business? Here are some of the key benefits:

1. Identifying cash shortages: The biggest advantage of a 13-week cash flow model is that it helps you see any upcoming cash shortages before they happen. This gives you time to take action—whether that’s cutting costs, finding new revenue, or securing a loan to cover short-term gaps.
2. Planning for growth: If your business is growing, a 13-week cash flow model helps you plan for expansion by showing when you’ll have the cash to invest in new equipment, hire staff, or increase inventory.
3. Managing seasonal fluctuations: Many businesses face seasonal ups and downs in sales. With a 13-week forecast, you can plan ahead for those slower periods, ensuring you have enough cash on hand to cover expenses even when revenue dips.
4. Making better decisions: Whether you’re deciding whether to launch a new product, hire more staff, or spend more on marketing, your cash flow model helps you make those decisions based on solid financial data.

Wrapping Up

Building and maintaining a 13-week cash flow model is a simple but powerful way to manage your business’s finances. By creating a forecast in Google Sheets or Excel, regularly updating it with actual data, and using it to plan ahead, you’ll have a clear view of your cash flow situation and be better prepared to navigate any challenges.

With a well-built cash flow model, you can make smarter, more informed decisions and ensure your business is always in a healthy financial position. Whether you’re just starting out or managing a growing company, having control over your cash flow is key to long-term success.