# The 13-week cash flow

> Northwind's next thirteen weeks, built from the September 30 balance sheet and the IRS's deposit calendar, and read for its lowest week.

Source: https://lopifi.com/learn/13-week-cash-flow-forecast
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**How do I build a 13-week cash flow forecast?** Northwind's next thirteen weeks, built from the September 30 balance sheet and the IRS's deposit calendar, and read for its lowest week.

Monthly runway hides the week payroll lands before the big customer pays. The [13-week cash flow](https://lopifi.com/md/glossary/13-week-cash-flow) doesn't. It lists every receipt and payment in the week it will hit the bank, for the next quarter, starting from today's reconciled balance. It's the [direct method](https://lopifi.com/md/glossary/direct-method) pointed forward: no profit, no accruals, only cash.

Opening cash (The reconciled bank balance, not the bank app's.) → Known items (What the balance sheet already owes and is owed.) → Recurring (Payroll, rent, tax deposits, on their real dates.) → Expected receipts (Collections on terms, sales on the day.) → Roll forward (Replace last week with actuals; add week 14.)

How a 13-week forecast is built, and rebuilt every week.

## Start from September 30

Northwind starts from $35,352.60, the ledger's cash after the September bank reconciliation. The bank showed a different figure because of a deposit in transit and a rent check not yet presented. Both clear in week 1 and change nothing, because the ledger already has them. Then the balance sheet tells you the first items: the supplier is owed $6,000, the trade customer owes $8,000, and the [Dividend](https://lopifi.com/md/glossary/dividend) declared on the 30th is due on October 15.

Payroll taxes and the sales tax return leave the bank on the government's calendar, not Northwind's. [Payroll and tax dates](https://lopifi.com/md/learn/13-week-cash-flow-forecast/payroll-and-tax-dates-in-the-forecast) places each one.

After that comes September's pattern, repeated with no growth. That's the conservative base case: walk-in sales of $10,260 a month, banked on the day with sales tax in them; the trade customer's $22,000 invoice paid a month later on [30-day terms](https://lopifi.com/md/glossary/payment-terms); $17,000 of stock a month paid to the supplier a month later; net pay of $6,707.40 on payday; and rent, power and the sales tax return on their dates.

| Week | Starts | Receipts | Payments | Closing cash |
| --- | --- | --- | --- | --- |
| 1 | Oct 1 | 0 | (6,000) | 29,352.60 |
| 2 | Oct 8 | 10,260 | 0 | 39,612.60 |
| 3 | Oct 15 | 8,000 | (4,045.20) | 43,567.40 |
| 4 | Oct 22 | 0 | (8,707.40) | 34,860 |
| 5 | Oct 29 | 0 | (17,000) | 17,860 |
| 6 | Nov 5 | 10,260 | 0 | 28,120 |
| 7 | Nov 12 | 22,000 | (2,335.20) | 47,784.80 |
| 8 | Nov 19 | 0 | (7,917.40) | 39,867.40 |
| 9 | Nov 26 | 0 | (2,000) | 37,867.40 |
| 10 | Dec 3 | 10,260 | (17,000) | 31,127.40 |
| 11 | Dec 10 | 22,000 | (2,335.20) | 50,792.20 |
| 12 | Dec 17 | 0 | (1,210) | 49,582.20 |
| 13 | Dec 24 | 0 | (8,707.40) | 40,874.80 |

Northwind's 13-week cash flow, base case. Each week opens on the last one's close.

The low point is week 5, at $17,860, when last month's stock bill is paid before this month's sales come in. Monthly runway never shows that week. It's the number that decides whether anything else can be bought this quarter.

> **The 13-week forecast's job is the lowest week, not the last one.**

**Scenario — Can we buy a second van in October?.** The founders want a second van, $24,000 outright, on Oct 26. The quarter ends with cash to spare, so on a monthly view it fits. Add it to the 13 weeks and week 5 closes at (6,140). The fix is timing, not money: buy it after a collection, finance it, or lease it.

**Monthly runway**
- Pro: One number, easy to compare over time
- Con: Blind to timing inside the month
- Best for: Board headline, fundraising

**13-week cash flow**
- Pro: Catches the low week
- Pro: Built from real bills and dates, so easy to check against the bank
- Con: Only a quarter out
- Con: Has to be rolled forward weekly to stay true
- Best for: Tight cash, big purchases, lender conversations

**Operating model**
- Pro: Links profit, balance sheet and cash
- Pro: Runs a year or more
- Con: Monthly, so it can miss a bad week
- Con: Only as good as its drivers
- Best for: Planning the year, testing hires and prices

Three cash views, side by side.

1. **Actuals in.** Close last week: replace its forecast with what the bank actually did.
2. **Variance out.** Explain any line off by more than your threshold. A late customer is a finding; a forgotten bill is a process fix.
3. **Roll forward.** Add week 14, so the horizon stays thirteen weeks.
4. **Read the low point.** Read the lowest week. If it's below the cushion you've set, act now, while it's still weeks away.

Every Monday.

*[Figure: bank reconciliation]*

Illustrative: the forecast starts from a reconciled balance, never from the bank app's figure.

**In this lesson:** the IRS's deposit calendar and the sales tax return, placed week by week.

## Pages in this lesson

- [Payroll and tax dates in the forecast](https://lopifi.com/md/learn/13-week-cash-flow-forecast/payroll-and-tax-dates-in-the-forecast) — 5 min. When are payroll tax deposits due, and how do they go in a cash forecast?

## Where this lesson's rules come from

- [ASC 230-10-45-25; 230-10-50-2](https://asc.fasb.org/230/tableOfContent) — The direct method is encouraged; an entity using the indirect method must disclose interest and income taxes paid (codification)
- [Wikipedia, “Cash flow forecasting”](https://en.wikipedia.org/wiki/Cash_flow_forecasting) — Cash flow forecasting, direct and indirect — background (reference)

## Read further

- https://lopifi.com/md/journal-entries/payroll
- https://lopifi.com/md/journal-entries/accounts-payable
- https://lopifi.com/md/journal-entries/dividends
- https://lopifi.com/md/calculators/dso
- https://lopifi.com/md/calculators/dpo
- https://lopifi.com/md/calculators/cash-conversion-cycle
- https://lopifi.com/md/differences/direct-vs-indirect-method
- https://lopifi.com/md/startups/form-941-and-payroll-tax-deposits
- https://lopifi.com/md/startups/bank-reconciliation-step-by-step
- https://lopifi.com/md/accounting/thirteen-week-cash-flow
- https://lopifi.com/md/accounting/runway
- https://lopifi.com/md/docs/domain/07-cash-and-treasury

- **Track:** [Finance](https://lopifi.com/md/learn/finance)
- **Lesson:** Lesson 3 of 8 — 10 min
- **Terms taught:** [13-week cash flow](https://lopifi.com/md/glossary/13-week-cash-flow), [Direct method](https://lopifi.com/md/glossary/direct-method), [Payroll liabilities](https://lopifi.com/md/glossary/payroll-liabilities), [Payment terms](https://lopifi.com/md/glossary/payment-terms), [Dividend](https://lopifi.com/md/glossary/dividend), [Forecast](https://lopifi.com/md/glossary/forecast)
- **Previous:** [Default alive or default dead, Finance · Lesson 2](https://lopifi.com/md/learn/default-alive-or-default-dead)
- **Next:** [Payroll and tax dates in the forecast](https://lopifi.com/md/learn/13-week-cash-flow-forecast/payroll-and-tax-dates-in-the-forecast)
- **The course:** https://lopifi.com/md/learn