Cash flow forecasting is one of the highest-value services a bookkeeper can offer — and one of the least commonly delivered. Most bookkeepers focus on historical accuracy: clean books, timely BAS lodgements, reconciled accounts. These are essential. But looking forward — telling the client where their cash is going over the next 13 weeks — is where the practical advice happens.
This guide covers how to build a simple, effective cash flow forecast for a small business client, what data to use, and how to present it.
Why 13 Weeks?
The 13-week (rolling quarterly) cash flow forecast has become the standard for operational cash management because:
- It covers one full quarter — a meaningful planning horizon for most small businesses
- It's short enough to be based on actual known data (existing receivables, known bills, payroll schedules)
- It rolls forward each week, so it stays current
- It aligns with BAS quarters and quarterly tax obligations
A 12-month forecast is useful for strategic planning but too uncertain week-by-week for operational decisions. A 4-week forecast is too short to surface upcoming crises. Thirteen weeks is the operational sweet spot.
What Goes Into the Forecast
A 13-week cash flow forecast has three sections:
1. Opening Cash Position
The starting point: what is the bank balance at the beginning of the forecast period? This is the actual reconciled bank balance, not the accounting balance (which may include uncleared items).
2. Cash Inflows
- Debtor collections — based on the aged receivables ledger. Which invoices are due to be paid, and when? Apply the client's actual collection pattern (if most clients pay in 45 days, model it at 45 days, not the invoice terms of 30).
- Cash sales — for retail or hospitality clients, based on recent trading history and any known seasonal variation.
- Contracted revenue — known periodic payments: retainers, subscription fees, maintenance contracts.
- GST refunds or government payments — if a BAS refund is expected, include the likely receipt date.
- Loan drawdowns — if the client is drawing on a facility, include planned drawdowns.
- Other known inflows — asset sales, insurance proceeds, grant payments.
3. Cash Outflows
- Payroll — the most predictable outflow. Use the actual payroll schedule (weekly, fortnightly, monthly).
- Superannuation — paid quarterly (28 days after quarter end). Include in the quarter when due, not when the liability accrues.
- Supplier payments — from the aged creditors ledger, applying the client's actual payment pattern.
- Rent and lease payments — fixed, easy to include.
- BAS payments — include the expected BAS lodgement date and the estimated liability (based on current coding).
- Loan repayments — principal and interest, from loan schedules.
- ATO PAYG instalments — from the instalment notice.
- Other known outflows — equipment servicing, insurance premiums, professional fees.
Building the Model
The simplest format is a weekly spreadsheet (or tab in an existing spreadsheet):
- Column A: Week ending date
- Columns B–onwards: Inflow categories (one column per category)
- Below the inflows: Outflow categories (one row per category)
- Net cash movement per week = total inflows minus total outflows
- Cumulative cash balance = opening balance + cumulative net movements
The cumulative balance row is the one to watch. Where does it go negative? When does it recover? That tells you whether the client can meet their obligations, and if not, when the crunch comes.
Using Real Data vs Assumptions
The forecast is only as good as the underlying data. The hierarchy of confidence:
High confidence (use actual data):
- Existing debtors from the aged receivables
- Known fixed payments (rent, loan repayments, payroll)
- Confirmed purchase orders or contracts
Medium confidence (use reasonable estimates):
- Expected new sales based on recent trading
- Supplier payments based on aged creditors and payment history
- BAS estimate based on current period's transactions
Low confidence (use conservative estimates):
- New business pipeline
- Seasonal trading increases
- Government grant approvals
For stressed businesses, it's better to use conservative assumptions on inflows and realistic assumptions on outflows. Optimistic forecasting that turns out to be wrong is worse than no forecast at all.
What to Do with the Forecast
Once the forecast is built, three questions:
1. Does the balance go negative in the next 13 weeks? If yes, when? And is the shortfall addressable? Options include: accelerating debtor collections (chasing outstanding invoices harder), delaying non-critical supplier payments, drawing on an overdraft facility, or — for a genuinely insolvent business — seeking restructuring advice.
2. Are there specific weeks with large outflows? BAS weeks, super payment weeks, and annual insurance renewals are predictable crunch points. A business with a thin cash buffer can end up in short-term difficulty even when the overall year is profitable. Identifying these spikes early allows the client to plan (e.g., keep the prior month's revenue in the account rather than drawing it).
3. Is there a structural cash flow problem or a timing problem? A timing problem (cash tight in October but fine in November because a large debtor pays) is manageable. A structural problem (outflows chronically exceed inflows) requires a different conversation about pricing, costs, or the viability of the business.
Presenting the Forecast to Clients
Most small business owners don't read spreadsheets well. A simple traffic-light format works:
- Green: Cash balance above a safe threshold (e.g., one month of fixed costs)
- Amber: Cash balance below the safe threshold but positive
- Red: Cash balance projected to go negative
A single page with the weekly cash balance displayed as a bar chart, with the three key BAS/super/payroll dates marked, communicates the position clearly without overwhelming the client.
Rolling Forward Each Week
The forecast's value comes from being kept current. Each week:
- Update the opening balance (actual bank balance)
- Remove the prior week's actuals (replace forecasts with what actually happened)
- Add a new 13th week to the forecast horizon
- Revise any estimates that have changed (a large debtor has paid early; a large order has come in)
A 15-minute weekly update is enough. The discipline of the rolling forecast is what makes it useful — a point-in-time forecast prepared once quickly becomes stale.
Bookkeeper's Role vs Adviser's Role
Bookkeepers should be comfortable building and maintaining a 13-week cash flow forecast. They should also be comfortable interpreting what it shows and flagging concerns to the client.
Where the forecast reveals a potential insolvency issue — the business will not be able to meet its debts as they fall due — the bookkeeper should recommend the client speak with their accountant or a restructuring adviser. The bookkeeper is not the appropriate person to advise on whether the business is technically insolvent or what steps to take. That's a qualified adviser's role.
What the bookkeeper can do is make sure the client has visibility of what's coming. Cash flow crises are almost always visible in advance. The forecast makes the invisible visible.