Why 12 Weeks?
The 12 week (or 13 week) timeframe strikes a balance between day-to-day cash visibility and strategic planning. It’s long enough to spot trends or risks on the horizon, but short enough to remain accurate and actionable especially in dynamic environments.
Steps to Build a 12 Week Cash Flow Forecast:
- Start with Beginning Cash Balance
Begin each week with the actual or projected cash on hand.
- Project Cash Inflows
Include all sources of incoming cash, such as:
- Receivables
- Grants, reimbursements, or tax revenues
- Investment income
- Other known deposits
- Estimate Cash Outflows
Forecast all payments, such as:
- Payroll and benefits
- Vendor payments
- Debt service
- Rent, utilities, and recurring expenses
- Capital expenditures or one-time outflows
- Calculate Weekly Net Cash Flow
Subtract outflows from inflows to determine the weekly net change.
- Update Ending Cash Balance
Add the weekly net cash flow to the beginning cash balance to get the new ending balance which becomes the starting point for the next week.
- Review and Adjust Weekly
The forecast should be a living tool. Update it weekly with actuals and refine future estimates based on the latest data.
Pro Tips
- Use historical data to estimate recurring inflows and outflows.
- Be conservative with uncertain revenue and aggressive with known expenses.
- Use a simple spreadsheet or leverage treasury software for automation and accuracy.
What’s important here?
A 12 week cash flow forecast gives you a forward-looking view of your organization's liquidity, helping you stay ahead of potential shortfalls and make smarter financial decisions.
When you regularly track and update inflows and outflows, you can build trust with stakeholders, avoid surprises, and position your team to act, not just react.
Whether you're managing daily operations or planning for the unexpected, a short-term forecast is a foundational tool for financial health.