Finance · Cash flow · Component
The cash forecast
Money in and out by week, thirteen weeks ahead — long enough to see a problem and short enough to be accurate.
The deliverable
What it is
Monthly cash figures hide the week the balance goes negative. Weekly granularity is what makes the forecast an instrument rather than a report.
Thirteen weeks is the standard horizon because it is long enough to act on and short enough that the individual receipts and payments are largely known.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
The inflows
Expected receipts by week, timed by when money actually arrives.
3 attributes: Amount · Expected · Confidence
LearnThe outflows
Expected payments by week, including the ones that are easy to forget.
3 attributes: Amount · Due · Flexibility
LearnThe balance
The projected closing position each week, and the lowest point.
3 attributes: Closing balance · Minimum across horizon · Action threshold
Learn
Forecast weekly. Monthly totals hide the week the balance goes negative, which is the only week that matters.
The other components in cash flow
The conversion cycle
How long from paying for inputs to being paid for outputs — the measure that explains why growth consumes cash.
LearnThe runway
How long the organisation survives at current burn — a number someone should know without calculating it.
Learn