🔮 Why Cash Flow Forecasting Matters

Cash flow is the lifeblood of any manufacturing business. You might be profitable on paper, but without sufficient cash flow, you can’t pay suppliers, meet payroll, or invest in growth. A robust 13-week rolling cash flow forecast is your early warning system and strategic planning tool rolled into one.

📅 The 13-Week Rolling Forecast Advantage

Unlike annual budgets that quickly become outdated, a 13-week rolling forecast provides real-time visibility into your cash position. Update it weekly, and you’ll always have a clear view of the next quarter, enabling you to:

• ✅ Identify potential cash shortfalls before they become crises
• ✅ Time major purchases and investments strategically
• ✅ Negotiate better payment terms with suppliers
• ✅ Make informed decisions about taking on new orders

📊 Key Components to Track

📈 Cash Inflows

Customer payments: Don’t just rely on invoicing dates—track actual payment patterns. If customers typically pay in 45 days, forecast accordingly, not optimistically.

Government grants and R&D tax credits: Factor in the timing of these receipts, especially if you’re relying on them for working capital.

📉 Cash Outflows

Supplier payments: Map out your payables schedule, considering early payment discounts versus preserving cash.

Payroll and PAYE: These are non-negotiable and predictable—build them in first.

VAT payments: Remember quarterly VAT bills—they can significantly impact cash in specific weeks.

Capital expenditure: Plan equipment purchases around your cash peaks.

🔧 Building Your Forecast

Start with last week’s closing balance, add expected inflows, subtract planned outflows. The key is updating it weekly with actuals—this turns your forecast from guesswork into a reliable tool.

🚨 Red Flags to Watch For

• ⚠️ Consistently negative balances in weeks 8-13
• ⚠️ Growing gap between invoices raised and cash collected
• ⚠️ Increasing reliance on overdraft facilities
• ⚠️ Declining cash conversion cycle efficiency

🎯 Take Action Today

If you’re not currently running a 13-week rolling cash flow forecast, start this week. Even a simple spreadsheet is better than flying blind. Need help setting up a professional system? DVFO’s Momentum Package includes comprehensive cash flow forecasting and weekly financial rhythm to keep you on track.