It may seem bizarre but when training to become an accountant, I was never taught how to manage cash.   I am sure that there are thousands of other accountants with a similar gap in their formal education; although there are some like me who have learnt through experience.

While accountants have conventions for preparing accounts, it does strike me that methods used for day to day cash management vary greatly between businesses and over the years I’ve seen the good, the not so good and the virtually nonexistent!

I generally encourage clients to prepare a weekly cash forecast covering each of the next 13 weeks.    Many businesses may feel that they can’t realistically look more than two or three weeks ahead, so why bother to look further?

  • It focuses the mind on the sales pipeline and customer receipts.   Simply by seeing the forecast in black and white helps ensure that there is a proper focus on these areas and can help improve performance.
  • It provides an early warning system.  Being aware of potential cash flow issues sooner rather than later makes it far easier to take corrective action than if caught out by an unexpected cash flow problem.  Forewarned is forearmed and unexpected cash problems are far more likely to cause long term damage to a business (that is assuming it survives!).
  • VAT payments are on a quarterly basis, so over 13 weeks you’ll always factor in a VAT payment, which may help avoid nasty shocks!
  • If actual cash turns out to be below expectations, there is probably a problem in the business that you don’t know about (think about it!).    However, it does help to have a means of working out your cash expectations!


While forecasts should be more accurate in the short term, moving out there will be less visibility and one thing is certain, actual outcomes will differ from forecasts.  Having said that best estimates are better than no estimates!  In driving parlance, the possibility of there being an unexpected traffic jam wouldn’t stop someone from looking at a map to plan a journey.

If you would like help setting up a 13 week forecasting process tailored to your business then please contact me, David Lewis, on 07836 331677 or e-mail