As a Business Turnaround Advisor, if there’s one document I insist on having in place, it’s a detailed, forward-looking cash flow projection. For businesses in distress, a 14-week (or 90-day) rolling cash flow is not just a financial tool; it's your early warning system, your navigation chart, and often, your lifeline.
Many business owners rely on historical P&Ls or bank balances, but these tell you nothing about tomorrow’s liquidity. A 14-week cash flow forces you to look ahead, anticipate challenges, and proactively manage your most precious resource: cash.
Here's a step-by-step guide to building this critical projection, even if you feel overwhelmed by your current financial state.
The Goal: To create a dynamic, weekly forecast of all cash inflows and outflows for the next 14 weeks, identifying potential cash deficits before they become crises.
Tools Needed: A spreadsheet program (Excel, Google Sheets) is ideal.
Phase 1: Foundation & Opening Balance (Week 0)
Ch
oose Your Start Date (Week 0): Pick a specific date (e.g., end of the last completed week, or today). This is your "as of" date for your opening cash balance.
Determine Your Opening Cash Balance:
Gather all bank account balances (checking, savings, operating accounts) as of your start date.
Crucial Tip: Be ruthlessly honest. Don't inflate. Include any outstanding checks that haven't cleared yet (reduce your balance by these). This is your true, available cash.
Why this is crucial: This is your starting point. Any error here cascades through the entire projection.
Phase 2: Projecting Cash Inflows (The Money Coming In)
Fo
r each of the next 14 weeks, project all cash receipts. Think about when the money hits your bank, not when you earn it.
Accounts Receivable (A/R) Collections:
List All Open Invoices: Get an aged A/R report.
Estimate Collection Dates: For each invoice, based on customer payment history and terms, estimate the exact week you expect to receive payment.
Be Realistic (or Conservative): Don't assume everyone pays on time. Factor in typical delays. If a customer is known to be slow, project their payment later.
Why this is crucial: A/R is often the largest single inflow. Accurate timing here is vital.
Cash Sales / Immediate Receipts:
Estimate Weekly Sales: Based on historical trends and current activity, project your weekly cash sales (e.g., retail, service businesses paid upfront).
Consider Seasonality/Known Events: Adjust for any upcoming promotions, seasonal peaks/dips, or known large orders.
Why this is crucial: This provides a baseline of consistent income.
Other Inflows:
Loan Disbursements: If you have an approved loan or line of credit draw, project when those funds will actually hit your account.
Asset Sales: If you plan to sell equipment, property, or inventory, project the cash proceeds and the expected week of receipt.
Owner Injections: If you (the owner) plan to put cash into the business, project the timing.
Tax Refunds: If applicable, project when you expect to receive any refunds.
Why this is crucial: These irregular but significant inflows can drastically alter your weekly position.
Phase 3: Projecting Cash Outflows (The Money Going Out)
Fo
r each of the next 14 weeks, project all cash payments. Think about when the money leaves your bank, not when the expense is incurred.
Accounts Payable (A/P) Payments:
List All Open Bills: Get an aged A/P report.
Schedule Payments: For each bill, determine the exact week you plan to pay it. This is where you can exert control.
Prioritize (Ruthlessly): Identify critical vendors (e.g., those providing essential raw materials, utilities) vs. those you might need to stretch payments with.
Why this is crucial: A/P management is a key leverage point in cash flow.
Payroll:
Gross Wages, Taxes, Benefits: Project weekly/bi-weekly/monthly payroll, including all associated taxes and benefits.
Don't Forget Payroll Tax Due Dates: These are non-negotiable and often large.
Why this is crucial: Payroll is typically the largest fixed expense and highly sensitive.
Operating Expenses (Weekly/Monthly/Periodic):
Rent: Project monthly rent payments.
Utilities: Estimate weekly/monthly utility payments (electricity, water, gas, internet).
Insurance: Project weekly/monthly/quarterly premiums.
Marketing/Advertising: Project planned spending.
Professional Fees: Project payments to accountants, lawyers, consultants (including your BTA!).
Software/Subscriptions: List all recurring charges.
Supplies: Project weekly spending on office supplies, small consumables.
Fuel/Travel: Estimate weekly expenses.
Why this is crucial: These are the regular drains that add up quickly.
Debt Service Payments:
Loan Principal & Interest: Project all scheduled loan payments for every loan (bank, private, vendor financing).
Line of Credit Draws/Repayments: Factor in any planned draws or repayments.
Why this is crucial: These are often significant fixed outflows and crucial for maintaining lender relationships.
Capital Expenditures (CapEx):
Planned Purchases: Project any planned purchases of equipment, vehicles, or property.
Be Realistic (or Cut): In a turnaround, most CapEx should be halted unless absolutely critical for survival/revenue generation.
Why this is crucial: Unplanned CapEx can quickly derail a fragile cash position.
Taxes:
Sales Tax, Income Tax (Estimated), Property Tax: Don't forget any upcoming tax payments.
Why this is crucial: These are legal obligations with significant penalties for non-payment.
Phase 4: Calculating Weekly Net Cash Flow & Ending Balance
Fo
r each of the 14 weeks:
Total Weekly Inflows: Sum all projected cash coming in for that specific week.
Total Weekly Outflows: Sum all projected cash going out for that specific week.
Nehttps://static-assets.strikinglycdn.com/images/editor2/draft-editor/bold.svgt Cash Flow (for the week): Total Inflows - Total Outflows.
Ending Cash Balance: Opening Cash Balance (for that week) + Net Cash Flow (for that week).
Beginning Cash Balance (for next week): The Ending Cash Balance of the current week becomes the Beginning Cash Balance for the following week.
Phase 5: Analysis & Action (The BTA's Role)
On
ce your 14-week projection is built:
Identify Cash Deficits (Red Flags): Look for any weeks where your Ending Cash Balance dips below zero, or below your minimum operating cash threshold. These are your crisis points.
Action: If you see a negative balance in Week 3, you have 3 weeks to find a solution.
Test Scenarios (Sensitivity Analysis):
What if sales are 10% lower?
What if a major customer pays two weeks late?
What if a critical vendor demands payment earlier?
Action: See how these changes impact your cash flow. This helps you build resilience.
Pinpoint Leverage Points:
Can you accelerate A/R collections?
Can you negotiate extended payment terms with non-critical vendors?
Are there expenses you can cut immediately?
Can you delay any non-essential CapEx?
Action: This is where strategic decisions are made to preserve cash.
Communicate with Lenders (Proactively):
If your cash flow shows a deficit, you now have the data to approach your lender with a clear understanding of your need and a proposed solution (e.g., forbearance, interest-only payments).
Why this is crucial: Demonstrating this level of financial insight builds credibility and trust.
Roll Forward Weekly: This is a living document. Every week, update it with actual inflows and outflows for the week just passed, and then extend the projection out another week, always keeping 14 weeks in view. Your estimates will become more accurate over time.
The Takeaway: Building a 14-week cash flow projection might seem daunting, especially when you're already stressed. However, it is the single most empowering financial exercise you can undertake during a turnaround. It transforms vague anxiety into concrete data, allowing you to move from reactive crisis management to proactive strategic decision-making. Don't just build it; use it to guide every financial decision you make.