Summary
This guide provides a comprehensive framework for building and maintaining a 13-week rolling cash flow forecast, which is a critical tool in operational finance. It outlines the necessity of a 13-week forecast, emphasizing its effectiveness in identifying cash flow issues before they become critical. The document details the prerequisites for creating the forecast, including the need for current cash balances, accounts receivable and payable aging reports, payroll registers, and visibility into the sales pipeline. It describes the structure of the accompanying Excel template, which includes tabs for inputs, forecasts, scenarios, and variance tracking. The guide also presents key metrics to monitor weekly and offers rules for responding to cash flow troughs, along with common pitfalls to avoid when forecasting. Additionally, it discusses the importance of regular updates and reviews of the forecast to ensure accuracy and effective decision-making. Extensions for longer forecasting periods are suggested once the 13-week forecast is reliable.
