The weekly question that makes a cash forecast useful

A polished cash forecast can still leave directors surprised by the bank balance. If it is rolled forward each week without comparing forecast with actual receipts and payments, the same weak assumptions can survive for months.

The question I would start with is: what did we expect, what happened, and which assumption needs to change?

Find the cause behind the variance

If a receipt was late, was the expected date unrealistic, the invoice disputed or the collection action missed? If a payment was absent from the forecast, was the commitment unknown to finance or simply omitted?

Separate timing differences from omissions or changes that will permanently affect the cash position. A delayed receipt may move to another week; an unexpected cost needs a different response. Those explanations lead to different actions. Changing a spreadsheet cell will not resolve a disputed invoice or a purchasing process that commits cash before finance hears about it.

Review the lowest point, not just the closing balance

A rolling 13-week forecast can help directors see near-term pressure from payroll, tax, suppliers and customer receipts. I would review the lowest cash point, available facilities and any restrictions on using them, rather than relying only on the quarter-end balance.

Where headroom is tight, weekly totals may conceal a shortfall before a major receipt arrives. Daily forecasting around those dates may be necessary. Thirteen weeks is a practical short-term horizon, not a substitute for longer-term planning or a formal going-concern assessment.

A useful review ends with a decision: chase a receipt, resolve a dispute, reconsider spending or discuss funding early. Give that action an owner and a date.

For this week’s review: take the three largest cash variances and identify the assumption behind each. The improvement should appear in the next forecast and in someone’s actions.

Further reading: Understanding the cash demands of growth.