Cash flow forecast: build a 13-week plan for your business

A profitable business can still struggle to pay its bills if customer receipts arrive after wages, suppliers and tax payments fall due. A cash flow forecast helps you see that timing gap before deciding what to do about it.

This guide shows UK limited companies and LLPs how to build a rolling 13-week forecast in a spreadsheet, identify their lowest cash point and assess whether funding repayments would be manageable.

The aim is not to predict every pound perfectly. It is to create a working plan that supports decisions about spending, collections and funding.

1. Gather the records behind your forecast

Start with current information rather than copying last month's budget. Gather:

• Bank balances and recent statements for each business account.
• Unpaid customer invoices, including due dates and collection notes.
• Supplier invoices and scheduled payment dates.
• Payroll costs, rent, utilities and subscriptions.
• Expected tax payments and any existing payment agreements.
• Loan repayments, finance commitments and planned equipment purchases.
• Confirmed orders and realistic estimates of other trading receipts.

Choose one person to maintain the forecast. Ask whoever handles sales, payroll and purchasing to confirm the assumptions affecting their area.

Keep a separate list of uncertain receipts or costs. This makes it easier to challenge assumptions without losing track of them.

2. Set up the spreadsheet

Use one column for each of the next 13 weeks. Label columns with actual week-ending dates so invoices and payment schedules can be matched to them.

Create these main rows:

Link each week's opening cash to the previous week's closing cash. Avoid manually entering those linked balances, as this makes mistakes harder to spot.

3. Establish your true opening cash

Use the money available at the forecast's start date. Reconcile it against payments already instructed but not yet reflected in the balance.

Do not count an unused overdraft limit as cash. Show available borrowing separately so you can distinguish your own funds from borrowing capacity.

Also identify money that cannot be used for ordinary business spending, such as restricted funds. Document any exclusions so someone reviewing the forecast can reconcile it to the bank accounts.

If you include several accounts, do not treat transfers between them as new income or expenditure in the consolidated forecast.

4. Put receipts in the week they should clear

A cash forecast records payment timing, not the date you issue an invoice or recognise a sale.

Review unpaid invoices individually where practical. Use payment terms, customer payment history and any confirmed payment promises to estimate receipt dates. An overdue invoice without a reliable payment commitment should not automatically sit in week one.

For card sales, account for settlement timing. For deposits and staged contracts, separate each expected payment rather than entering the full contract value immediately.

Keep unconfirmed sales distinguishable from committed receipts. Record the reason for each significant assumption so it can be reviewed later.

5. Schedule payments without hiding awkward weeks

Enter outgoing cash when it is expected to leave the bank. Avoid spreading a large quarterly bill evenly across the forecast just because that produces a smoother picture.

Include payroll-related payments, annual renewals, stock purchases, existing finance commitments and planned withdrawals or distributions where applicable.

Be consistent about VAT. If customer receipts and supplier payments include VAT, forecast the actual VAT payment or refund separately. Do not also strip VAT out of those receipts and payments. Check uncertain amounts and dates with your accountant.

A weekly forecast can hide a midweek problem. If payroll leaves on Tuesday but a major customer pays on Friday, examine that week day by day.

6. Find the gap and set a cash buffer

Scan the closing balances for the lowest point. Then choose a minimum cash buffer based on essential payments, receipt uncertainty and the flexibility of your costs.

Your initial gap can be expressed as:

Cash buffer minus lowest forecast closing balance, with no gap recorded if the result is negative.

This identifies the largest forecast shortfall against your buffer. Do not add together every week's negative closing balance: those balances already carry earlier shortfalls forward.

Before considering borrowing, test practical changes:

• Follow up disputed and overdue invoices.
• Agree deposits or staged payments for future work where appropriate.
• Discuss revised supplier terms before payments fall due.
• Delay non-essential purchases where commercially sensible.
• Reduce stock commitments that are not supported by demand.

Only include revised payment terms as agreed once the other party has confirmed them. Keep proposed changes separate.

7. Test a downside scenario and funding repayments

Duplicate the forecast and change a few important assumptions. You might move a major receipt later, reduce uncertain sales or bring forward an essential repair.

Keep the changes plausible and clearly labelled. Compare the lowest balance and the duration of any shortfall with your original forecast.

If considering funding, add the proposed net proceeds on the expected receipt date, then enter every repayment and fee according to the proposed terms. Treat this as a scenario, not confirmed cash.

For revenue based finance or a merchant cash advance, model the collection mechanism in the actual proposal. Where payments vary with sales, test both lower and higher sales levels. Avoid counting deductions twice if your forecast already uses net settlement receipts.

Check the total repayable, payment frequency, term, security requirements and any personal guarantee. A forecast can help assess affordability, but it does not establish eligibility or approval.

If borrowing only postpones a recurring deficit, revisit costs, margins and trading assumptions rather than treating funding as the complete solution.

8. Update it every week

Replace completed weeks with actual receipts and payments, then add a new week at the end. Investigate material differences and adjust future assumptions.

Keep a short action list alongside the spreadsheet: the issue, the person responsible and the next review date. This turns the forecast into a cash management routine rather than a document prepared only for a funding application.

How GD Capital can help

GD Capital offers business loans, revenue based finance, merchant cash advance and other business funding to UK limited companies and LLPs. Use your forecast to clarify the amount, purpose and repayment capacity before you check your eligibility.