The 13-week forecast answers the question of how far the cash reaches with a date rather than an estimate. We build it, run the weekly cycle and hand it over afterwards.
A bank requires a rolling cash forecast as a condition, an investor expects it in standard reporting, or management simply no longer knows exactly how far the cash reaches. What usually exists is an annual plan derived from earnings – and therefore unsuitable for this question.
The set-up is project work over a few weeks; the operation afterwards is a fixed weekly routine.
The interim CFO builds the forecast on the direct method: expected receipts based on realistic payment behaviour rather than agreed terms, payments by due date, and all mandatory payments in full – social security contributions, VAT, payroll tax, insurance, loan repayments. These forgotten items are the most common cause of nasty surprises.
Then the weekly cycle: roll-forward, plan-versus-actual variance, scenarios for receipts that fail to arrive or financing that is delayed. And finally the reporting format that the bank, shareholders or investor actually expect.
Once the forecast is running, it is transferable: set-up for a fixed term, maintenance afterwards internally or as an ongoing service.
Direct method: expected receipts from receivables based on actual payment behaviour, payments by due date, mandatory payments captured in full.
Roll-forward and plan-versus-actual variance. The variance analysis is the real value, not the forecast.
What happens if a receipt fails to arrive or financing is delayed? Without this view no room to act can be determined.
Preparation for bank, shareholders or investor – in the form expected there.
A quarter is short enough for week-by-week planning straight from cash flows and long enough to see a squeeze with lead time. It is not a legal term – but it is market standard.
For the annual plan, yes; here, no. The indirect derivation hides exactly the week-to-week shifts the forecast is made for.
In portfolio companies of private equity investors the 13-week forecast is often part of standard reporting. It is the only instrument that answers the question of how far the cash reaches with a date.
Calculating with payment terms instead of payment behaviour, forgotten mandatory payments, no weekly reconciliation, and only one version without scenarios.
Ideally the internal team after handover. Where that is not possible, maintenance continues as an ongoing service.
The service: CFO as a Service and Finance as a Service. For a fixed-term mandate see Interim CFO, day rates by role on the pricing page.
Term in the glossary: 13-week cash flow forecast.
Related situation: Restructuring and turnaround. In depth in the article 13-week cash flow forecast: structure, template and the typical mistakes.