Your bank balance tells you about today. A cash flow forecast tells you about the next three months, and that's where the decisions are.
The 13-week forecast is one of my favorite tools for small businesses because it's simple enough to keep up and long enough to see trouble coming. Here's the basic version:
Start with cash today. What's actually in the bank.
Add what's coming in each week. Invoices you expect to collect, deposits from booked jobs. Be honest about who pays late.
Subtract what's going out each week. Payroll, rent, the card payment, loan payments, insurance, estimated taxes, that equipment repair you've been putting off.
Look for the tight weeks. Any week where the ending balance gets uncomfortable is a week you can plan for now: move a purchase, push on a slow invoice, or line up a credit line before you need it.
Update it every week. Fifteen minutes. Drop the week that passed, add a new week at the end.
It doesn't have to be fancy. A spreadsheet with 13 columns works.
This is the kind of planning I do with clients as a fractional controller, and it's often the moment owners say, "I wish I'd had this last winter."
If you'd like help building your first one, send me a message through the Contact page.
— Rachel, Two Miles LLC