13-week cash flow forecast: how to build one from your Xero reports

Short answer: a 13-week cash flow forecast is a table with one column (or row) per week for the next three months. It starts from today’s real bank balance, adds the money you expect to come in that week, takes off the money you expect to go out, and carries the closing balance into the next week. The number that matters is the lowest closing balance and which week it falls in, because that is the week you need to act on now. Everything you need is already in Xero: the reconciled bank balance, the Aged Receivables and Aged Payables reports, your pay runs, your tax due dates and the last 12 months of bank transactions for the costs that come round once a quarter or once a year.

Menu names move between Xero releases and differ slightly by region. If a label below does not match your screen, search Xero Central for the report name.

Why 13 weeks, and why weekly

Thirteen weeks is one quarter. That is long enough to catch the quarterly payments (GST or VAT, tax instalments, super or pension) that a 30-day view misses, and short enough that most of the numbers come from invoices and bills that already exist rather than guesses. It is weekly because cash problems happen on a particular day: a fortnight where wages and a tax payment land together can empty the account even when the month as a whole looks fine.

Xero’s own short-term cash flow looks 7 or 30 days ahead from invoices and bills. The newer Cash flow manager can look further on some plans, with adjustments you add yourself. A 13-week forecast in a spreadsheet does the same job by hand, but you choose what goes in, and it forces you to list the costs that never arrive as bills. Paid forecasting apps such as Float build and roll a 13-week forecast from Xero for you, from about GBP 99 a month; Float vs ReportPilot sets out what each does.

Where each line comes from in Xero

Line in the forecast	Where to get it in Xero
Opening balance	Today’s bank balance, after reconciling the bank feeds. Leave out accounts you never touch.
Money from invoices already sent	Aged Receivables Detail. Put each invoice in the week that customer usually pays, not the week it is due. Leave out invoices that are so old you doubt they will be paid.
Money from sales not invoiced yet	Your average weekly receipts. Take the money received from customers over the last 13 weeks (the bank account’s transactions, or the receipts line of the Statement of Cash Flows) and divide by 13. Adjust for seasons you know about.
Supplier bills	Aged Payables Detail for bills already in Xero, by due date, plus repeating bills and an average for the bills that have not arrived yet.
Wages	Your pay runs, in the weeks they are paid, including the tax and super or pension paid with them.
GST, VAT and income tax	The due dates of your returns and instalments. These are rarely bills in Xero, so they are the line most often forgotten.
Loan and lease repayments	Your bank transactions. Only the interest is on the Profit and Loss, so the P&L understates them.
Annual and quarterly costs	The last 12 months of bank transactions: insurance, registrations, accountant’s fees, software paid yearly. Put each one in the week it will next fall due.
Your own drawings	What you actually take out, in the weeks you take it. If you are not sure how much that should be, see how much can I pay myself?

Use the direct method: actual money in and out of the bank. Do not start from profit. Depreciation, unpaid invoices and stock bought ahead all make profit and cash different, which is the whole reason for the forecast (see profit but no cash).

A worked example: a cleaning company

Made-up figures for a commercial cleaning business with $30,000 in the bank today:

• Invoices already sent: $48,000 on Aged Receivables. Going by how each customer has paid before, $42,000 arrives over the next four weeks. The other $6,000 is over 90 days old, so it is left out.
• New sales: receipts from customers have averaged $9,000 a week, so weeks 5 to 13 get $9,000 each.
• Wages: $11,000 every second week (weeks 1, 3, 5, 7, 9, 11, 13).
• Suppliers: $2,500 a week. Rent: $3,000 a month (weeks 1, 5, 9). Loan: $1,800 a month (weeks 2, 6, 10).
• Quarterly GST: $9,500 in week 4. Income tax instalment: $5,000 in week 8. Annual vehicle insurance: $4,800 in week 7.

Week	Money in	Money out	Closing balance	What goes out
1	$14,000	$16,500	$27,500	Wages, suppliers, rent
2	$12,000	$4,300	$35,200	Suppliers, loan
3	$10,000	$13,500	$31,700	Wages, suppliers
4	$6,000	$12,000	$25,700	Suppliers, GST
5	$9,000	$16,500	$18,200	Wages, suppliers, rent
6	$9,000	$4,300	$22,900	Suppliers, loan
7	$9,000	$18,300	$13,600	Wages, suppliers, insurance
8	$9,000	$7,500	$15,100	Suppliers, income tax
9	$9,000	$16,500	$7,600	Wages, suppliers, rent
10	$9,000	$4,300	$12,300	Suppliers, loan
11	$9,000	$13,500	$7,800	Wages, suppliers
12	$9,000	$2,500	$14,300	Suppliers
13	$9,000	$13,500	$9,800	Wages, suppliers
Total	$123,000	$143,200

What the forecast shows that a 30-day view does not:

1. The first month looks fine. Old invoices coming in hold the balance above $25,000 through week 4. A 30-day projection would stop there.
2. The low point is week 9, at $7,600. That is less than one pay run of $11,000, so if a single large customer paid a week late, the week 11 wages would be in trouble.
3. It is a steady drift, not one bad week. From week 5, $81,000 comes in and $96,900 goes out, about $1,800 a week more out than in once the tax and insurance are counted. Fixing one week will not fix that.

What the owner can do about it now, while there are still weeks to spare: chase the $6,000 that is over 90 days (see who owes me money in Xero), ask to pay the insurance monthly, and look at the gap itself: prices, slow payers and costs. The guide to improving cash flow in a small business ranks those by how much cash each frees.

How to keep it useful

1. Roll it every week. Replace the week that just ended with what really happened, add a new week 13 at the end, and update the opening balance from the bank. Managing cash flow sets out a 15-minute weekly routine for this, with a worked four-week example.
2. Compare forecast with actual. If money in keeps coming in below forecast, your customers pay more slowly than you assumed. Move them later, not just this week but in every week.
3. Watch the low point, not the end. Write the lowest balance and its week at the top of the sheet. That is the number to plan around.
4. Decide what is too low. A common floor is the next pay run plus the next tax payment. To pick a longer-term target, see how many months of cash should a business have?
5. Keep it simple. One row per type of payment is enough. A forecast you update every Monday beats a detailed one you build once.

For the year beyond the next 13 weeks, a monthly forecast does the same job: this 12-month cash flow forecast example follows a seasonal business through its winter low point and tests a new hire, and the free cash flow forecast template builds the 12 months from your figures. To test a big new customer or slower payers over six or twelve months, a cash flow model calculates every month from a few drivers so one change updates the lot. Before a loan application or a big purchase, a 3-way cash flow forecast adds the forecast Profit and Loss and Balance Sheet, so tax, loan principal and money customers still owe cannot drop out.

If cash has been falling for months rather than dipping in one week, the free cash runway calculator works out how long it lasts at your recent pace, without logging in to anything.

Common questions

What is a 13-week cash flow forecast? A week-by-week estimate of the money coming in and going out of the business for the next 13 weeks (one quarter), starting from today’s bank balance. Each week’s closing balance becomes the next week’s opening balance, so you can see the week cash is lowest before it arrives.

Why 13 weeks and not 12 or a full year? Thirteen weeks is exactly one quarter, so it always includes one round of quarterly GST or VAT, tax instalments and super or pension payments. Beyond about three months, weekly figures turn into guesses, so longer forecasts are usually done by month instead.

Can Xero do a 13-week cash flow forecast? Not directly as a weekly table. Short-term cash flow looks 7 or 30 days ahead. Cash flow manager, on plans that include it, can look further ahead with adjustments you add. Most owners export Aged Receivables and Aged Payables to a spreadsheet and build the 13 weeks there, as in this guide.

What is the difference between the direct and indirect method? The direct method lists actual money in and out (customer receipts, wages, bills, tax), which is what a 13-week forecast uses. The indirect method starts from profit and adjusts for non-cash items and changes in what is owed. It suits longer forecasts and year-end statements, not weekly planning.

How accurate does it need to be? Accurate enough to find the low week. The first four weeks should be close, because they come mostly from invoices and bills that already exist. Later weeks lean on averages, so roll the forecast every week and correct your assumptions when actual figures differ.

What should I do if the forecast goes below zero? Act in the weeks before it happens: chase overdue invoices, ask customers for deposits on new work, agree later dates for some supplier bills or the tax payment, delay spending you can delay, and talk to your bank about an overdraft before you need it, not on the day.

Getting the warning without building the sheet

ReportPilot reads your Xero figures and sends a short email every Monday in plain English. It shows the bills due in the next 14 days against the cash in the bank, and says so when they are more than the cash. When cash has fallen in two of the last three months, it shows how long cash lasts at that pace. It also covers sales and profit against last month and money owed to you that is past due. It asks Xero for read-only access, and there is a 14-day free trial with no card.