The three cash views every business needs
The first view is historical: what happened to cash over the last 12 months. Not just ending balances, but the pattern of inflows and outflows. This tells you about seasonality, working capital swings, and baseline burn. Most accounting systems produce this easily from the cash flow statement.
The second view is current: where is cash right now. Operating account balances, receivables aging (future inflows), payables aging (future outflows), committed expenses. Together these give a 30-day forward picture. This is your week-to-week management view.
The third view is forward: projected cash for the next 13 weeks minimum, 12 months ideally. This is the planning view - what decisions can you make, what capital do you need, when do you need to act on fundraising. Without this view, cash decisions become reactive rather than strategic.
The 13-week rolling forecast
Thirteen weeks is the planning standard because it bridges tactical and strategic. Shorter than that, you miss the mid-term picture. Longer than 13 weeks, the assumptions become too uncertain to be useful. The forecast gets more precise as it moves from week 13 back to week 1.
The structure: opening cash balance, plus expected inflows by week (committed collections from AR, expected new billings, loan draws if any), minus expected outflows by week (payroll, rent, committed AP, tax payments, other recurring), equals closing cash for the week. That closing becomes the next week's opening.
Update it weekly. Every Monday, book last week's actuals, roll the forecast forward, and adjust for anything that has changed. If this is not a weekly ritual, the forecast drifts from reality within a month. A forecast that is 4 weeks stale is useless for decisions.
Watching for warning signs
The biggest warning sign is a widening gap between operating cash flow and net income. If you are profitable on the P&L but cash keeps dropping, working capital is absorbing the profits. This is usually AR growing faster than revenue or inventory building up beyond sales pace.
Another warning: payroll becoming a larger percentage of operating outflows each quarter. This is normal during growth phases but becomes dangerous if revenue growth does not keep pace. A business where payroll grows 40% and revenue grows 15% is compressing margins quickly.
A third warning: lumpiness in the cash pattern. Regular businesses have relatively steady cash flow. Companies that see huge month-over-month swings usually have a concentrated customer issue, a seasonal issue that is not being planned around, or billing inconsistency. Each of these is worth investigating.
Making the forecast drive decisions
Every significant decision should reference the cash forecast. Hiring plan - does it fit within available cash? New software purchase - what does it do to the 13-week picture? Taking on a new vendor - does the upfront cost get absorbed by available cushion? Without the forecast, these decisions are made on feel.
Set trigger points in the forecast. "If projected 13-week ending balance drops below $500K, we pause discretionary hires. If below $300K, we trigger bridge financing conversation." Having these written down means emotions do not drive the decision when cash gets tight.
Share the forecast with at least the CFO/controller, CEO, and any operations leader whose decisions affect cash. Keeping the forecast private to finance makes it less useful for company decisions. Operations teams whose decisions affect cash should see the implications of those decisions in the forecast.