The 13-week cash flow: seeing a cash crunch a quarter early

By Bradley J. Combs, CMA · October 2026

Profitable companies run out of cash all the time. Revenue is booked when it’s earned, but cash arrives when the customer pays. Inventory, equipment purchases, loan principal, and tax deposits all take cash without touching the P&L the same week. A 13-week cash flow forecast closes that gap by tracking the one thing that has to be right: the bank balance, week by week.

Why 13 weeks

Thirteen weeks is one quarter. It’s short enough to forecast with real confidence, because most of the receipts and payments in that window are already known: open invoices, scheduled payroll, bills on hand, loan payments. And it’s long enough to act. Spotting a shortfall in week 9 leaves time to accelerate collections, renegotiate terms, delay a purchase, or talk to your lender before the money is needed. Quarterly items such as estimated tax payments and insurance premiums also fall inside the window, so they don’t surprise you.

How it’s built: the direct method

A 13-week forecast uses the direct method: actual cash in and actual cash out, by week. It does not start from net income. Each week has the same structure:

• Opening cash — the prior week’s ending balance (week 1 starts from the reconciled bank balance).
• Receipts — collections on open invoices from the AR aging, timed by how each customer actually pays rather than by the invoice terms, plus collections on sales expected to be invoiced inside the window.
• Disbursements — payroll and payroll taxes on their pay dates, vendor payments on the dates you intend to pay them, rent, insurance, and utilities, debt service (principal and interest), sales-tax deposits, estimated tax payments or owner tax distributions, and planned equipment purchases.
• Ending cash — opening cash plus receipts minus disbursements.
• Headroom — ending cash compared with the minimum balance you want to hold, plus any available room on a line of credit.

A single week, worked through

Illustrative figures. Total disbursements are $192,000, so the week uses $12,000 of cash even though the business may be profitable on paper that month.

Keeping it honest

A 13-week forecast is only useful if it’s rolled forward every week. Each week, the oldest week drops off, a new week 13 is added, and the forecast for the week just ended is compared with what actually happened. That variance is the most valuable number on the page: if collections keep landing a week later than forecast, the timing assumptions get corrected, and the next forecast is better than the last.

Common mistakes

• Using the P&L as a proxy. Net income includes non-cash items such as depreciation and leaves out cash items such as loan principal and inventory purchases.
• Forecasting collections by invoice terms. A customer on net-30 who pays in 52 days should be forecast at 52.
• Forgetting the lumpy payments. Quarterly estimated taxes, annual insurance premiums, and bonus payouts are the ones that cause surprises.
• Building it once. A forecast that isn’t compared with actual results every week drifts out of date quickly.

How we use it

The 13-week cash flow is a standard part of every Bradley & Company reporting package. It’s refreshed on each reporting cycle, tied into the longer-range forecast, and built from each customer’s actual payment history. See how engagements work →