Close the stress test with a breach date and action deadline
For every week, calculate closing cash as opening cash plus receipts minus payments, then carry that closing amount into the next opening. A useful closeout names the user-selected floor, first breach, lowest point, main sensitivity driver and last reversible action date.
Required 13-week closeout
- All amounts use the same CU and stated indirect-tax treatment. (not complete)
- Every opening balance equals the prior week’s closing balance. (not complete)
- Baseline and lower-receipts cases change only the labelled receipt assumption. (not complete)
- The first floor breach and lowest cash week are visible, not hidden in an average. (not complete)
- The action deadline occurs before the irreversible payment or commitment. (not complete)
A weekly chain is only reproducible when every week rolls forward
A few low-point snapshots cannot show where a forecast changed. For each week, opening cash must equal the prior week’s closing cash; add receipts expected to reach the bank, subtract dated outflows, and carry the closing balance forward. Then change only the receipt assumptions selected for the downside case.
Build the seasonal input from your own records
Derive a seasonal receipts case from comparable, reconciled periods in the same business. It is a scenario input—not a demand forecast—and should show how identifiable one-offs and receipt timing were handled.
Prepare the lower-receipts case
- Choose comparable historical periods from reconciled business records. (not complete)
- Remove or label one-off closures, promotions and unusual customer events. (not complete)
- Adjust for material price, sales-mix and capacity changes before reusing a pattern. (not complete)
- Model expected bank receipt dates rather than accounting revenue or invoice dates. (not complete)
- Test a separate lower-receipts sensitivity instead of one expected path. (not complete)
- Refresh the case when the timing basis, operating model or comparable period changes. (not complete)
Build the trough before choosing a response
Prerequisites, sequence and checkpoints
- Choose the weekly horizon, opening cash, neutral currency, tax basis and user-selected floor. (not complete)
- Map fixed outflows and pre-season commitments to realistic payment dates. (not complete)
- Map receipts to expected bank dates and label their evidence state. (not complete)
- Roll every weekly closing balance and identify the first floor breach and lowest point. (not complete)
- Reduce or delay uncertain receipts, then record action deadlines before the breach. (not complete)
Review the weekly low points
| Checkpoint | Baseline closing cash | Lower-receipts closing cash |
|---|---|---|
| Week 1 | 30,000 CU | 30,000 CU |
| Week 6 | 15,000 CU | 10,000 CU |
| Week 9 trough | 9,000 CU | 2,000 CU |
| User floor | 8,000 CU | 8,000 CU |
Roll a 13-week baseline and lower-receipts case
| Week | Opening cash | Baseline receipts | Outflows | Baseline close | Lower-receipts close |
|---|---|---|---|---|---|
| 1 | 30,000 | 8,000 | 8,000 | 30,000 | 30,000 |
| 2 | 30,000 | 7,000 | 8,000 | 29,000 | 29,000 |
| 3 | 29,000 | 7,000 | 9,000 | 27,000 | 27,000 |
| 4 | 27,000 | 6,000 | 9,000 | 24,000 | 22,000 |
| 5 | 24,000 | 6,000 | 8,000 | 22,000 | 18,000 |
| 6 | 22,000 | 5,000 | 12,000 | 15,000 | 10,000 |
| 7 | 15,000 | 7,000 | 8,000 | 14,000 | 8,000 |
| 8 | 14,000 | 7,000 | 9,000 | 12,000 | 5,000 |
| 9 | 12,000 | 6,000 | 9,000 | 9,000 | 2,000 |
| 10 | 9,000 | 10,000 | 8,000 | 11,000 | 4,000 |
| 11 | 11,000 | 11,000 | 8,000 | 14,000 | 7,000 |
| 12 | 14,000 | 12,000 | 9,000 | 17,000 | 10,000 |
| 13 | 17,000 | 12,000 | 9,000 | 20,000 | 13,000 |
Locate the first actionable shortfall
Reproducible user scenario
Fictional tax-excluded weekly CU scenario; receipt reductions are assumptions, not predictions.
| Step | Input or arithmetic | Decision meaning |
|---|---|---|
| Baseline | Week 9 closes at 9,000 CU against an 8,000 CU floor | 1,000 CU headroom |
| Lower receipts | Week 9 closes at 2,000 CU against the same floor | 6,000 CU shortfall |
| Action date | Work backward from Week 9 to the last reversible commitment | The deadline matters more than Week 13 alone |
Update evidence without rewriting history
At the weekly review, replace elapsed estimates with actual bank movements, keep the previous forecast version and re-date future assumptions. A receipt that has merely been invoiced should not silently become banked cash. If a commitment has moved or become irreversible, update the response deadline as well as the balance.
Limitations, evidence and next action
Use the calculation owner for the next step
- 13-Week Cash Flow Forecast
Forecast weekly closing cash, the first shortfall and the funding gap across a 13-week operating horizon
- Cash Runway Planner
Identify a dated cash-buffer breach and peak funding gap
Questions and boundaries
- Is 8,000 CU a recommended buffer?
- No. It is a fictional user-selected policy input.
- Does the seasonal-trough lower-receipts case predict demand?
- No. The seasonal-trough lower-receipts case exposes cash sensitivity to an explicit receipt-timing assumption; it does not predict demand.
Sources and scope
- Protecting cash flow from seasonality — British Business Bank: Supports dated scenario planning, not a universal cash buffer or funding recommendation.
- Protecting cash flow and working capital — British Business Bank: Stable cash-flow and working-capital context only; no finance product or solvency conclusion.