How far ahead should a 13-week cash flow forecast be accurate?

Weeks one to four should be close, usually within a few percent. Weeks five to thirteen are directional, and that is expected. If week two is regularly wrong by a wide margin, the problem is usually the receipts assumption rather than the model. Track variance by line each week and the near weeks tighten quickly.

Should the forecast be weekly or daily?

Weekly is standard and enough for most decisions. Move to daily when the balance is going to come close to zero or close to a facility limit inside the next fortnight, because within a single week the order of a large receipt and a payroll run decides whether you have a problem.

Can we build a 13-week forecast in Excel?

Yes, and most good ones are in Excel. What matters is the structure: inputs separated from calculations, visible assumptions, no hardcoded numbers inside formulas, and a clean way to drop in a new week of actuals. A dedicated tool is not necessary and often makes it harder to change an assumption quickly.

What a 13-week cash flow forecast should include

A 13-week cash flow forecast should include the opening bank balance, customer receipts modelled week by week from the debtors ledger and actual payment behaviour, supplier payments from the creditors ledger and your payment runs, payroll and superannuation on their real payment dates, tax payments including BAS and PAYG, loan repayments and interest, capital spend, any one-off items such as settlements or deposits, and the closing bank balance for each of the 13 weeks. It should also show headroom against your facility limit, a stated assumption for every receipt line, and a variance column comparing last week’s forecast with what actually happened. What it should not include is anything taken straight from the profit and loss, because a 13-week forecast is built on cash movements rather than on accounting revenue and expenses.

Why 13 weeks and not 4 or 26

A quarter is long enough to see a shortfall with time to act, and short enough to forecast at invoice level.

The direct method, and why the indirect method fails here

Building from receipts and payments versus adjusting the P&L, and where the indirect method hides timing.

Receipts: the line everyone gets wrong

Model on how customers actually pay, not on their agreed terms, and split the large accounts out individually.

Payments: fixed, committed and discretionary

Separating what you must pay from what you can move is what gives the forecast decision value.

Payroll, superannuation and tax

Dates are not negotiable and these are usually the largest single outflows, so they belong on their own lines.

Facility headroom and covenant dates

The bank balance is not the constraint. The limit is.

The variance column

Comparing forecast to actual each week is the part that makes the forecast believable to outsiders.