Terms we use, defined

13-week cash flow forecast

A 13-week cash flow forecast is a week-by-week projection of cash receipts and cash payments over the next quarter, built from the direct method rather than from the profit and loss. Thirteen weeks is the standard window because a quarter is long enough to show a shortfall while there is still time to act, and short enough to forecast at the level of individual invoices and payment runs. It is the same tool as a short-term cash flow forecast (STCF); the two names are used interchangeably. We build these with your finance team, along with the weekly variance process that keeps them accurate. See cash flow and financial modelling.

Cash culture

Cash culture describes a business where people outside finance understand how their decisions affect the bank balance, and where cash is discussed as openly as sales or profit. It shows up in small habits: a sales manager checking payment terms before agreeing a deal, or operations flagging a stock commitment early. We build it by putting the weekly cash position in front of the people who create it, with the variances named. See cash flow and financial modelling.

Co-build

Co-build is our method: your team builds the model with us instead of receiving it from us. Your analyst is in every working session, constructs parts of the model, and runs a full cycle before we hand over. It sits between the two normal options, which are advice that leaves with the adviser and software you rent forever. The point is that the model still works a year later because the people using it understand how it was made. See how we work.

Direct method cash flow forecast

A direct method cash flow forecast is built from expected cash receipts and cash payments, line by line, rather than by starting with profit and adjusting for non-cash items. The indirect method is standard in statutory accounts and unhelpful for short-term forecasting, because it obscures the timing of individual payments. Every short-term model we build uses the direct method, reconciled to the bank balance each week. See cash flow and financial modelling.

Driver-based model

A driver-based model calculates its outputs from the operational quantities that actually move the business, such as volume, price, headcount, site count or churn, instead of growing last year’s numbers by a percentage. It lets you test a real change rather than an abstract one, because you can alter the thing your executives argue about. We build strategic and long-term models this way so that scenarios differ by assumption rather than by structure. See strategic finance.

FP&A solutions architect

An FP&A solutions architect designs and co-builds the models, processes and tools a finance function needs, then hands them over to the team that will run them. The role sits between a financial modeller, who builds what is asked for, and a data engineer, who builds systems a finance team cannot maintain. The market does not yet have a settled name for it, which is why we use this one. It describes the work rather than any one person’s job title. See how we work.

Scenario model

A scenario model holds several possible futures in a single structure so they can be compared fairly. Each scenario uses the same drivers with different values, which means the differences between the outputs come from assumptions rather than from inconsistent construction. We use three to five scenarios, each a genuine choice the business could make, including doing nothing. Each one reports cash, earnings, funding requirement and the point at which it stops working. For decisions in the next 12 months, such as which sites to keep, see short-term cash flow and financial modelling. For multi-year strategy, acquisitions and refinancings, see strategic finance.

Sensitivity analysis

Sensitivity analysis measures how much the answer changes when one input changes, and shows which assumptions the decision actually rests on. Most models have two or three inputs that move the result and a long list that barely matter. Finding them tells you where to spend your remaining time on data. We use it to identify the switching point: how far an assumption can move before you would choose a different option. It is part of both short-term financial modelling and strategic finance.

Short-term cash flow forecast (STCF)

A short-term cash flow forecast, usually shortened to STCF, is a weekly forecast of cash movements over a short horizon, most often 13 weeks, built on the direct method and updated against actuals every week. It is the same thing as a 13-week cash flow forecast; advisory firms and lenders tend to say STCF, boards tend to say 13-week. It is the tool a business uses when it needs to know whether it can meet its obligations, and it is what lenders and investors ask for when confidence in the numbers has dropped. We build the model and the weekly process together, because the model alone stops working within a month. See cash flow and financial modelling.

Working capital cycle

The working capital cycle is the time between paying for something and being paid for it, measured through debtor days, creditor days and stock turns. A long cycle ties up cash in the ordinary running of the business, which is why a profitable company can still be short of money. We analyse the cycle down to the specific accounts, terms and process steps causing it, since most of the recoverable cash sits in a handful of them. Working capital optimisation is one of the three parts of short-term cash flow and financial modelling.