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Methodology

13-Week Cash Flow Forecast methodology

This planner applies a weekly cash identity across thirteen periods and flags negative cash and minimum-buffer breaches separately.
Duc Nguyen X.By Duc Nguyen X.ยท Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Expected receipts
E_w = R_w ร— C_w + ฮ”R_w

Where

R_w
planned receipts in week w (currency units/week)Source: Business record
C_w
receipt confidence (decimal)Source: User assumption
ฮ”R_w
receipt timing adjustment (currency units/week)Source: User decision
E_w
confidence-weighted expected receipts (currency units/week)Source: Calculated output
Total payments
P_w = L_w + S_w + T_w + D_w + O_w + ฮ”P_w

Where

L_w
payroll payments (currency units/week)Source: Business record
S_w
supplier payments (currency units/week)Source: Business record
T_w
tax payments (currency units/week)Source: Business record
D_w
debt payments (currency units/week)Source: Business record
O_w
other payments (currency units/week)Source: Business record
P_w
total payments (currency units/week)Source: Calculated output
ฮ”P_w
payment timing adjustment (currency units/week)Source: User decision
Weekly closing cash
K_w = K_prev + E_w + F_w โˆ’ P_w

Where

E_w
confidence-weighted expected receipts (currency units/week)Source: Calculated output
P_w
total payments (currency units/week)Source: Calculated output
F_w
funding action (currency units/week)Source: User decision
K_prev
previous week closing cash (currency units)Source: Calculated output
K_w
closing cash (currency units)Source: Calculated output
Buffer gap
G_w = max(0, B โˆ’ K_w)

Where

K_w
closing cash (currency units)Source: Calculated output
B
minimum cash buffer (currency units)Source: User decision
G_w
buffer funding gap (currency units)Source: Calculated output
max
non-negative maximum operator (operator)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The default fixture starts with bank cash, enters thirteen weeks of collections and payments, and shifts part of one receipt from week 3 to week 5.

Calculation and outputs

Example

The default fixture starts with bank cash, enters thirteen weeks of collections and payments, and shifts part of one receipt from week 3 to week 5.

Week 13 closing cash
11,100 currency units
First negative week
Not reached
First minimum-buffer breach
Week 10
Peak funding gap
14,300 currency units

The engine preserves the 13-period cash identity and identifies the earliest action week before the buffer is exhausted.

Interpretation

Use the earliest buffer breach as the action deadline, even when closing cash never becomes negative.

3. Validation and boundary checks

  • The engine requires exactly thirteen weekly rows.
  • Each week opens at the previous week closing cash.
  • A timing action cannot move more cash than exists in its source week.
  • Receipt confidence must remain between zero and one, and all cash amounts must be non-negative.

4. Assumptions and source classification

  • Use one currency and consistent tax basis across the full schedule.
  • Enter payments in the week cash is expected to leave the bank.
  • Funding actions are explicit user decisions and do not imply credit availability.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The planner is not bank reconciliation, bookkeeping, tax or insolvency advice.
  • Confidence weighting is a scenario device and does not predict customer payment behaviour.
  • The forecast becomes stale when dated receipts or payment commitments change.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the 13-Week Cash Flow Forecast planner and methodology.

Related reading

Guides to interpret the decision and its assumptions.

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