A cash forecast earns its place when it changes a decision. It might prompt you to chase an invoice today, stagger a stock order or reconsider an equipment purchase before the money leaves the bank.
Thirteen weeks is a useful working window because it is long enough to expose a quarterly payment cycle and short enough to discuss week by week. It is a management choice, not a prescribed reporting requirement. Seasonal businesses may need a longer forecast alongside it.
Keep the first version simple. One opening balance, identifiable receipts, identifiable payments and a closing balance for each week. Extra detail is worthwhile only when somebody can act on it.
Build from the bank, then the commitments
Start with a reconciled cash balance at a stated date. Show available borrowing separately, including any conditions or expiry date. A facility that has not been approved does not belong in the opening cash figure.
Populate the first few weeks from evidence: open invoices, supplier statements, payroll dates, lease payments, loan schedules and tax accounts. Later weeks will contain more estimates. Label those assumptions and give each important one an owner.
Receipts belong in the week you realistically expect payment. If a customer normally pays a fortnight after the due date, entering the contractual due date without comment makes the forecast look tidier than experience suggests. Treat an unsigned sales opportunity differently from an approved invoice.
The Australian Government’s cash flow guidance recommends identifying estimates and making clear whether figures include GST. For a working bank forecast, model the actual cash amounts, with GST included where relevant and tax remittances shown separately.
A tight week hiding inside a comfortable month
This fictional service business opens with $24,000. The first four weeks of its forecast are below. These are cash amounts; GST is included where applicable. Payments include all assumed wages, super, suppliers, tax and finance amounts due in each week.
| Cash movement | Week 1 | Week 2 | Week 3 | Week 4 |
|---|---|---|---|---|
| Opening cash | $24,000 | $20,000 | $7,000 | $20,000 |
| Customer receipts | $18,000 | $12,000 | $35,000 | $26,000 |
| Payments | ($22,000) | ($25,000) | ($22,000) | ($24,000) |
| Closing cash | $20,000 | $7,000 | $20,000 | $22,000 |
The month ends with $22,000, close to where it started. But week 2 falls to $7,000. If management has set an illustrative minimum operating buffer of $10,000, that week needs attention now.
Move one $10,000 receipt from week 2 to week 4. Week 2 now closes at negative $3,000, week 3 at $10,000 and week 4 still at $22,000. The month-end result has not changed. The business nevertheless runs out of cash in the middle unless it changes something or has suitable available funding.
This is why a monthly total can miss the problem. For a very tight business, examine daily timing as well; a healthy Friday balance does not resolve a payment due on Tuesday.
Give the model a realistic payroll calendar
Use the dates money actually leaves the bank. Net wages, PAYG withholding remittances and super payments are separate cash movements even when they relate to the same payroll run.
From 1 July 2026, Payday Super changes the timing of employer super contributions. Your forecast should reflect the current payroll and contribution arrangements, rather than continuing an old quarterly cash pattern. Check the current Fair Work explanation of Payday Super and your payroll provider’s processing timetable.
Also include annual insurance, subscriptions, leave coverage, maintenance and loan principal. These are easy to overlook when the forecast begins as a copy of last month’s profit and loss report.
Keep three versions of the important assumptions
You do not need three elaborate spreadsheets. Keep one base forecast, then test the few assumptions that could cause trouble. A slower collection scenario, a lower sales scenario and an unexpected repair may be enough to reveal the practical exposure.
Use specific changes. “Customer A pays two weeks late” can be traced and discussed. “Everything is 10% worse” is harder to translate into a sensible response. Avoid double-counting the same risk by reducing sales and also delaying receipts that have already been removed.
Agree the response before the shortfall becomes urgent. It may involve confirming a payment date, negotiating a supplier arrangement, deferring discretionary spending or discussing finance. Do not assume a creditor will accept late payment merely because the spreadsheet needs them to.
Make Friday’s update short
Replace the completed week with actual bank movements, explain the largest differences and add a new week at the end. Record whether a variance is a timing change, a permanent change or a mistake in the original assumption.
Then decide who needs to do what before the next review. A forecast with one clear action is more valuable than a beautifully formatted workbook that nobody opens until payroll is due.
Target Advisory 