The worst time to discover your business cannot make payroll is the week salaries are due.
By then, the choices are usually poor. You chase customers for payment, delay payments to suppliers, cancel purchases, borrow quickly, or put personal money into the business.
Yet many cash shortages are visible weeks before they become emergencies.
You already know when salaries are due. You know the rent date. Suppliers have payment terms. Customers have expected payment dates. Stock orders are planned.
What is often missing is one place where all those movements come together.
That is what a 13-week cash-flow forecast provides.
It shows the cash you expect to receive and pay, week by week, for roughly three months. Each week, you replace estimates with what actually happened, update the weeks ahead and add another week to the end.
For most small businesses, fixing that does not require sophisticated software. A well-maintained spreadsheet can be enough.
Build the forecast around cash, not sales
A cash-flow forecast is not a sales forecast.
Suppose you invoice a customer ₦4 million today and give them 60 days to pay.
You have made the sale. Your accounts may recognise the revenue.
But that ₦4 million should not appear as cash today.
It belongs in the week you realistically expect the customer to pay.
That distinction matters.
If a customer promises to pay next Tuesday but normally pays two weeks late, putting the money into next Tuesday’s column only makes the spreadsheet look healthier.
It does nothing for your bank balance.
Forecast what is likely to happen, not what you hope will happen.
The same applies to prospects. A proposal is not cash. A verbal promise is not cash. An unsigned contract is not cash.
Start with the money actually available to the business. Then map expected cash coming in and payments going out across 13 weekly columns.
What goes into the forecast
| Section | Line item | What to include |
|---|---|---|
| Cash in | Opening cash | Money available at the start of the week |
| Cash in | Cash sales | Sales paid for immediately |
| Cash in | Customer collections | Invoices you realistically expect customers to pay |
| Cash in | Deposits and advances | Upfront or milestone payments |
| Cash in | Other receipts | Other genuine cash inflows |
| Cash in | Total cash in | Sum of all money expected in |
| Cash out | Stock/raw materials | Supplier, inventory and production payments |
| Cash out | Payroll | Salaries and wages |
| Cash out | Rent | Rent due during the week |
| Cash out | Power and utilities | Electricity, diesel, fuel, internet and similar costs |
| Cash out | Logistics | Delivery, transport and warehousing |
| Cash out | Marketing | Advertising and promotional spending |
| Cash out | Taxes | Statutory payments due |
| Cash out | Loan repayments | Principal and interest due |
| Cash out | Equipment | Machinery, computers, vehicles and other assets |
| Cash out | Owner pay/withdrawals | Money taken by the owner |
| Cash out | Other payments | Other material cash outflows |
| Summary | Total cash out | Sum of all payments expected |
| Summary | Net cash movement | Total cash in minus total cash out |
| Summary | Closing cash | Opening cash plus net cash movement |
The closing balance for Week 1 becomes the opening balance for Week 2.
Continue until Week 13.
The spreadsheet itself is simple. The harder part is making the assumptions believable.
ALSO READ: Cash Flow Explained: Why Profitable Businesses Still Run Out of Money
Use the date you expect the money, not the invoice date
Suppose your records show that Customer A owes ₦2.8 million.
Do not automatically put ₦2.8 million into next week’s forecast.
Ask when Customer A is actually likely to pay.
If the invoice says 30 days but the customer’s approval process usually takes 45, use 45 days unless there is good reason to expect otherwise.
For a payment the business depends heavily on, test what happens if it arrives one or two weeks late.
A useful forecast should expose risk rather than hide it.
The same discipline applies to expenses. If electricity, transport or supplier costs regularly exceed what you budget, use what the business actually spends, not the figure you wish it spent.
A cash shortage can be visible a month early
Consider a hypothetical Lagos distributor.
The business starts Week 1 with ₦1.8 million.
A corporate customer owes ₦2.4 million, but payment is not expected until Week 6. The company must keep buying stock and meeting normal expenses before then.
Its simplified forecast looks like this:
| Week | Opening cash | Expected cash in | Expected cash out | Net cash movement | Closing cash |
|---|---|---|---|---|---|
| Week 1 | ₦1.80m | ₦0.90m | ₦1.10m | -₦0.20m | ₦1.60m |
| Week 2 | ₦1.60m | ₦1.40m | ₦1.25m | +₦0.15m | ₦1.75m |
| Week 3 | ₦1.75m | ₦0.70m | ₦1.00m | -₦0.30m | ₦1.45m |
| Week 4 | ₦1.45m | ₦1.00m | ₦1.65m | -₦0.65m | ₦0.80m |
| Week 5 | ₦0.80m | ₦0.60m | ₦1.50m | -₦0.90m | -₦0.10m |
| Week 6 | -₦0.10m | ₦2.40m | ₦1.05m | +₦1.35m | ₦1.25m |
Nothing looks alarming in Week 1.
By Week 5, the company has run out of cash.
If the owner only discovers the problem then, the business is already under pressure.
As seen in Week 1, the same problem gives management four weeks to respond.
The company can chase receivables earlier, negotiate supplier terms, postpone non-essential spending, request partial payment from the corporate customer or arrange appropriate short-term financing.
The forecast has not created money.
It has created time to act.
Set a minimum cash level
Do not wait for the balance to reach zero before treating the forecast as a warning.
Set a minimum cash level below which the business becomes exposed.
The amount will differ by company.
A retailer that needs to replenish fast-moving stock every week has different cash needs from a consulting firm whose largest regular expense is payroll.
Your minimum should reflect obligations that cannot easily be postponed: salaries, essential suppliers, utilities, debt repayments and other critical costs.
If the distributor above decides it should never fall below ₦500,000, management should act as soon as the forecast approaches that level, not when the balance finally turns negative.
That gives the business more room to negotiate and fewer reasons to panic.
Find the cause before looking for a loan
A forecast tells you when cash will become tight.
It does not tell you why.
If a reliable customer will pay two weeks after your supplier expects settlement, you may have a temporary timing gap.
If customers routinely pay late because invoices are sent slowly or nobody follows up, you have a collections problem.
If millions of naira are sitting in products that barely move, you have an inventory problem.
If sales are increasing but margins cannot cover operating costs, you have a profitability problem.
If money repeatedly leaves through unplanned owner withdrawals, you have a control problem.
These problems need different responses.
Borrowing can bridge a short-term mismatch in a healthy business. It cannot permanently repair poor pricing, weak margins, excessive stock or uncontrolled spending.
Before taking a loan, answer this:
What created the cash gap, and what will be different after the loan arrives?
If there is no clear answer, debt may simply move the problem forward.
Test large orders before saying yes
A profitable order can still be too expensive to execute.
Suppose a customer offers your company a ₦20 million contract. You expect to make ₦4 million in profit.
But executing it requires ₦13 million upfront for stock, production and logistics, while the customer wants 60 days to pay.
Can the business fund the ₦13 million and still meet payroll, suppliers and other commitments?
Put the contract into the forecast before accepting it.
If it creates a shortage, you can negotiate a deposit, introduce milestone payments, change the payment terms, reduce the order size or arrange appropriate working-capital finance.
Sometimes the correct decision is to reject the terms.
The same applies to inventory.
Before placing a large stock order, enter the supplier payment into the forecast.
If buying ₦3 million worth of stock pushes the business below its minimum balance for several weeks, check whether the order can be reduced, split or delayed.
Look at existing inventory too.
Stock has value, but it cannot pay salaries until somebody buys it.
Put the owner in the forecast
Owner withdrawals should not sit outside the system.
If you plan to take ₦300,000 from the business in Week 3, record it.
Ownership does not make the withdrawal financially invisible.
This is why separating personal and business money matters. BEA’s guide on separating personal and business money explains the wider discipline involved.
A business cannot forecast cash properly if money leaves whenever the owner’s personal needs arise.
Review the numbers every week
Your first forecast will be wrong.
That is normal.
What matters is understanding why.
Choose one day each week to compare the forecast with what actually happened.
You expected customers to pay ₦1.2 million but received ₦850,000.
Where is the remaining ₦350,000?
You expected logistics to cost ₦200,000 but spent ₦310,000.
Was that unusual, or are transport costs now consistently higher?
Do not simply overwrite the old numbers.
The differences tell you something about how the business operates.
Update the weeks ahead using what you have learned. Then remove the week that has passed and add another at the end.
You should always be looking roughly 13 weeks forward.
Someone should also own the process. In a very small company, that may be the founder. In another, it may be the accountant, bookkeeper or finance manager.
The person responsible should know which customers are expected to pay, which suppliers are due, what large purchases are planned and when management needs to act.
The forecast should change decisions
A useful forecast should help answer questions such as:
Can we make payroll?
Can we afford this stock order?
What happens if our biggest customer pays two weeks late?
Can we give a new client 60 days to pay?
Can we afford another employee?
Should we postpone this equipment purchase?
Can we service this loan?
Can the owner take money out this month?
Can we afford to execute this large contract?
If your spreadsheet cannot help answer those questions, it is probably inaccurate, too complicated or disconnected from the business.
A 13-week forecast does not replace your profit-and-loss statement, balance sheet, annual budget or tax records.
It answers a narrower question:
Will the business have enough cash to meet the obligations coming towards it?
Your banking app tells you how much money you have now.
The forecast tells you what is likely to happen next.
Start with the cash actually available. Enter the money customers are realistically expected to pay. Add every material obligation for the next 13 weeks. Set a minimum balance. Review the figures every week.
The spreadsheet does not need to look sophisticated.
It needs to warn you while you still have choices.
