A 13-week cash flow forecast shows which week runs short and by how much, which sizes a line of credit. Cash flow improves when money arrives on known days and bills are grouped. A forecast starts from the payroll dates.
Steel bills and payroll weeks: where a Pascagoula, MS fabrication shop's cash runs short
A 13-week cash flow forecast lists, week by week, the cash on hand, what comes in and what goes out. For an invented welding and fabrication shop in Pascagoula, MS, the big outflows are steel and supplier invoices and a biweekly payroll of $11,250, while customer payments arrive unevenly as jobs close.
| Week | Opening cash | Collections | Steel and supplier bills | Payroll | Closing cash |
|---|---|---|---|---|---|
| Week 1 | $18,400 | $14,200 | $6,900 | - | $25,700 |
| Week 2 | $25,700 | $9,800 | $4,200 | $11,250 | $20,050 |
| Week 3 | $20,050 | $12,600 | $15,800 | - | $16,850 |
| Week 4 | $16,850 | $8,400 | $8,600 | $11,250 | $5,400 |
| Week 5 | $5,400 | $15,900 | $5,100 | - | $16,200 |
| Week 6 | $16,200 | $7,300 | $12,400 | $11,250 | short by $150 |
| Week 7 | short by $150 | $6,800 | $7,700 | - | short by $1,050 |
| Week 8 | short by $1,050 | $13,100 | $3,900 | $11,250 | short by $3,100 |
| Week 9 | short by $3,100 | $16,400 | $6,200 | - | $7,100 |
| Week 10 | $7,100 | $9,600 | $12,300 | $11,250 | short by $6,850 |
| Week 11 | short by $6,850 | $14,800 | $4,100 | - | $3,850 |
| Week 12 | $3,850 | $8,900 | $5,600 | $11,250 | short by $4,100 |
| Week 13 | short by $4,100 | $15,200 | $3,800 | - | $7,300 |
Read down the last column of the invented table. In this invented case payroll falls in the even weeks only, and with the invented steel bills stacking up the shop runs short in weeks 6, 7, 8, 10 and 12; the deepest point is week 10, short by $6,850. By week 13 the invented forecast closes at $7,300. A line of credit sized to that deepest week, with a margin the owner chooses, covers the gap, and the draws are paid down as the later collections land.
How can a business improve cash flow? Changes a Jackson County, MS child care provider can test
For a child care provider, cash flow comes down to when tuition arrives compared with when staff are paid. A few changes move money earlier or make it arrive on known days:
- Bill tuition on the same weekday each week, ahead of the week of care
- Move families to automatic payments so tuition lands on a known day
- Order food and classroom supplies on one schedule rather than as they run low
- Track any program or subsidy payments on their own line, with the date each one arrives
- Keep a small line of credit for the weeks when payroll lands before tuition does
Payroll weeks weigh on providers with real staffs, and in Jackson County, MS just 3 of the 34 child day care services employer establishments had fewer than five employees in 2023 (County Business Patterns, NAICS 624410). In its own count, the 2024 Nonemployer Statistics file listed 360 child care services businesses without paid employees in the county (NAICS 62441).
Project payments against paydays: a week-by-week plan for a Jackson County, MS engineering office
An engineering office planning its cash week by week can start from the one date it controls, payday, and build the rest around it:
- Write down every payday for the next 13 weeks and the payroll amount on each
- Add the fixed bills with their due dates: rent, professional liability insurance, software and phones
- List the project costs the office expects to advance, such as subconsultant invoices, survey crew travel and printing
- Add expected client payments on the dates the office expects them, and mark which ones depend on a project milestone
- Run the weeks in order and mark any week where cash drops below a floor the office chooses
- Size any line of credit to the largest shortfall, and plan how each draw is paid back
The plan is only as good as the payment dates, so the office can rerun it each week as milestones are approved. A line of credit is one way to carry the short weeks; the line of credit page works through how draws and paydowns are priced.
Business funding articles: Pascagoula, MS businesses planning for a repair bill
A repair bill is a small, dated cost that many businesses meet sooner or later. Illustration only, invented figures: a machine shop's forklift needs a $3,940 hydraulic repair, and the customer payment that covers it arrives 24 days later. Carried on a credit line at a 13.8% annual rate, the 24-day gap costs the shop roughly $35.75 of interest, counted day by day.
The articles on this blog take up related costs one at a time: pulse welders, a used plate roll and contract castings for fabrication shops; a credit line for a millwright contractor while invoices are out; robotic mowers and a contract list for landscapers; apex locators, a soft tissue laser and an electrosurgery unit for dentists; practice loan terms for a clinic; and liens and UCC filings for owners. Each one names the cost, works an invented example and points to the funding type that fits.
By Deerbrook Lenders · Updated
