Skill: samledger67-dotcom/thirteen-week-cash-flow (version 1.0.1)

--- name: thirteen-week-cash-flow version: 1.0.0 author: PrecisionLedger description: > Build and maintain a rolling 13-week cash flow forecast — the gold standard for short-term liquidity management used by CFOs, turnaround advisors, and lenders. Produces a week-by-week cash receipts and disbursements model, variance tracking against actuals, borrowing base calculations, covenant monitoring, and executive cash dashboards. Use when managing tight liquidity, preparing for a credit facility, navigating distress, or when the board/lender demands weekly cash visibility. NOT for: long-range (12-36 month) strategic planning (use startup-financial-model), annual budgeting, tax cash flow projections, or real-time bank balance monitoring (connect to banking API for that). tags: - cash-flow - treasury - liquidity - forecasting - cfo - turnaround - lender - working-capital --- # 13-Week Cash Flow Forecast Skill The 13-week cash flow (13WCF) is the operating room monitor of finance — it tells you exactly how much oxygen (cash) you have left, week by week. This skill builds, maintains, and analyzes 13WCFs for any business size. --- ## When to Use This Skill **Trigger phrases:** - "Build a 13-week cash flow" - "How's our short-term liquidity?" - "Lender is asking for a weekly cash forecast" - "We need to manage cash tightly" - "Board wants a cash dashboard" - "Are we going to make payroll next month?" - "We're in a cash crunch — model it out" - "Variance analysis on our cash forecast" **NOT for:** - Annual budget models → use a full 3-statement model or `startup-financial-model` - Long-range (12-36 month) forecasts → use `startup-financial-model` - Tax cash planning → requires tax-specific skill - Real-time bank data syncing → connect to banking/QBO APIs - Accounts payable automation → use `invoice-automation` or `qbo-automation` - Cap table or equity cash modeling → use `cap-table-manager` --- ## Why 13 Weeks? The 13-week horizon (one quarter) is the standard because: - **Lenders require it** during credit facility draws and covenant testing - **Distressed situations** demand weekly visibility, not monthly guesses - **Payroll, rent, and debt service** are predictable within this window - **AR/AP cycles** (30-60-90 day terms) fully play out in 13 weeks - **Operationally actionable** — you can actually influence week 2-8 outcomes --- ## Model Structure ### Two Approaches **1. Direct Method (Preferred for Distress / Tight Liquidity)** Track actual cash in and cash out at the bank — receipts and disbursements. Most accurate for near-term. Does not reconcile to GAAP net income. **2. Indirect Method (For Stable Businesses)** Start from P&L and adjust for non-cash items and working capital changes. Better for businesses with predictable accrual-to-cash conversion. For most 13WCF use cases, **use the direct method**. --- ## Direct Method Structure ``` BEGINNING CASH BALANCE ───────────────────── CASH RECEIPTS: + Customer Payments / Collections (AR) + Cash Sales + Other Receipts (grants, tax refunds, asset sales) = Total Cash Receipts CASH DISBURSEMENTS: - Payroll & Payroll Taxes - Accounts Payable (vendor payments) - Rent / Lease Payments - Debt Service (principal + interest) - Utilities & Operating Costs - Insurance Premiums - Tax Payments (estimated quarterly, payroll taxes) - Capital Expenditures - Other Disbursements = Total Cash Disbursements NET CASH FLOW = Total Receipts - Total Disbursements ENDING CASH BALANCE = Beginning Cash + Net Cash Flow ───────────────────────────────────────────────────── CREDIT FACILITY: Beginning Revolver Balance + Draws - Repayments = Ending Revolver Balance LIQUIDITY: Available Cash (Ending Balance) + Available Revolver Capacity = Total Liquidity ``` --- ## Week-by-Week Build Process ### Step 1: Anchor on Opening Balance ``` Pull the actual bank balance as of the forecast start date. Use cleared balance, not book balance (reconcile first). Note: include all accounts (operating, payroll, reserve). ``` ### Step 2: Build Collections Forecast (AR Receipts) The hardest part — converting AR to cash by week: ``` AR Aging as of today: 0-30 days: $X → collect at [DSO-adjusted timing] 31-60 days: $X → collect with risk haircut 61-90 days: $X → apply collection probability % 90+ days: $X → apply risk factor (often 50-70% discount) Collection Timing Model: Invoice Date | Invoice Amount | Expected Pay Date | Week # | Amount For recurring customers: Track historical pay timing (e.g., customer pays net 45 on average) Apply that pattern forward to open invoices For new sales / pipeline: Week of billing + customer payment terms = collection week ``` **Collections Spreadsheet Template:** ``` Customer | Invoice # | Invoice Date | Due Date | Amount | Probability | Expected Week | Forecasted Receipt ---------|-----------|--------------|----------|--------|-------------|---------------|------------------- Acme | INV-1042 | 2026-03-01 | 3/31 | 5,000 | 95% | Week 3 | 4,750 Beta Co | INV-1041 | 2026-02-15 | 3/17 | 12,000 | 100% | Week 1 | 12,000 ... ``` ### Step 3: Build Disbursements Schedule Map every known outflow to a specific week: **Fixed/Recurring (easy to schedule):** ``` Payroll: Week 2, 4, 6, 8, 10, 12 (bi-weekly example) Rent: Week 1 (1st of month) Debt service: Week X (per loan schedule) Insurance: Week X (monthly or quarterly) Software subs: Week X (auto-billing dates) ``` **Variable (AP-driven):** ``` Vendor payments = AP aging + payment terms + cash position management - Which vendors can be stretched? (net 45 → pay net 60) - Which have early pay discounts? (2/10 net 30) - Which are critical suppliers (must pay on time)? AP Payment Priority Stack: Tier 1 (pay on time, always): Payroll, payroll taxes, critical vendors Tier 2 (pay per terms): Standard trade payables Tier 3 (stretch if needed): Non-critical, relationship-based payables ``` **One-Time / Lumpy:** ``` Tax payments: quarterly estimated taxes (dates known) CapEx: per purchase order / contract milestone Legal: per retainer or invoice ``` ### Step 4: Assemble the 13 Weeks ``` | Wk 1 | Wk 2 | Wk 3 | Wk 4 | Wk 5 | ... | Wk 13 |------|------|------|------|------|-----|------ Beg Cash | 500 | 420 | 385 | 610 | 540 | ... | X Receipts | 200 | 350 | 400 | 180 | 290 | ... | X Disbursem | (280)| (385)| (175)| (250)| (310)| ... | (X) Net Flow | (80)| (35) | 225 | (70)| (20)| ... | X End Cash | 420 | 385 | 610 | 540 | 520 | ... | X ``` ### Step 5: Revolver / Credit Line Integration ``` If the company has a revolver or line of credit: Minimum cash cushion target: $X (covenant or management decision) Draw logic: If Ending Cash < Minimum → Draw from revolver to cover gap If Ending Cash > Minimum + buffer → Repay revolver Revolver capacity check: Borrowing base = AR eligible × advance rate (typically 80%) Available = Borrowing Base - Outstanding Balance Week-by-week: Ending Cash (pre-revolver) + Draw - Repayment = Ending Cash (post-revolver) ``` --- ## Variance Analysis The 13WCF is only useful if you track actuals vs. forecast weekly. ### Weekly Variance Report Format ``` Week [X] Variance Analysis — [Date] RECEIPTS: Forecast: $XXX,XXX Actual: $XXX,XXX Variance: $X,XXX [F/U] — [explanation] DISBURSEMENTS: Forecast: $XXX,XXX Actual: $XXX,XXX Variance: $X,XXX [F/U] — [explanation] ENDING CASH: Forecast: $XXX,XXX Actual: $XXX,XXX Variance: $X,XXX [F/U] KEY VARIANCES: 1. Collections short $15k — Beta Co delayed payment to next week (confirmed) 2. Payroll $2k under — headcount timing (one hire pushed to Week 8) 3. AP $8k over — emergency HVAC repair not in forecast ROLL-FORWARD NOTE: Beta Co $15k pushed to Week [Y] Revolver draw increased by $10k to maintain minimum ``` **F = Favorable (more cash), U = Unfavorable (less cash)** ### Trend Signals to Watch ``` 🔴 RED FLAGS: - Ending cash below minimum 2+ consecutive weeks - Collections consistently 20%+ below forecast - Revolver utilization increasing each week (borrowing to fund operations) - Weeks where disbursements exceed receipts by >50% 🟡 YELLOW FLAGS: - Single-week collection shortfall (customer timing issue) - Forecast accuracy below 85% for 2+ weeks - Growing AP balance (stretching payables unsustainably) 🟢 GREEN: - Forecast accuracy >90% - Ending cash growing week-over-week - Revolver balance declining ``` --- ## Lender / Investor Reporting Package When submitting 13WCF to lenders, include: ``` Cover Memo: - Period covered (13 weeks from X to Y) - Opening cash balance (reconciled) - Key assumptions (collection timing, payroll dates, AP strategy) - Liquidity summary: lowest cash point, when, and amount - Borrowing base availability - Covenant compliance status Exhibits: 1. 13WCF Model (week-by-week table) 2. AR Aging and Collections Detail 3. AP Aging and Payment Schedule 4. Borrowing Base Certificate (if applicable) 5. Week-over-week variance summary (if rolling update) ``` --- ## Covenant Monitoring Many credit facilities include liquidity covenants. Track weekly: ``` Common Covenants: Minimum Liquidity: Cash + Available Revolver ≥ $X Minimum Cash Balance: Bank balance ≥ $X at week end Springing Covenant: Triggers additional restrictions if cash < $X Covenant Dashboard: Covenant | Threshold | Current | Headroom | Status -------------------|-----------|---------|----------|-------- Min Liquidity | $500k | $620k | $120k | ✅ Pass Min Cash | $200k | $385k | $185k | ✅ Pass Revolver Usage | ≤85% | 62% | 23% | ✅ Pass Early Warning: Flag when headroom < 25% of threshold ``` --- ## Structured JSON Output When producing 13WCF output for export or integration: ```json { "forecast_meta": { "company": "Acme Corp", "start_date": "2026-03-16", "end_date": "2026-06-07", "currency": "USD", "opening_cash": 420000, "method": "direct", "generated": "2026-03-16" }, "weeks": [ { "week_num": 1, "week_start": "2026-03-16", "week_end": "2026-03-22", "beginning_cash": 420000, "receipts": { "ar_collections": 180000, "cash_sales": 15000, "other": 0, "total": 195000 }, "disbursements": { "payroll": 0, "accounts_payable": 85000, "rent": 22000, "debt_service": 0, "taxes": 0, "other": 12000, "total": 119000 }, "net_cash_flow": 76000, "ending_cash_pre_revolver": 496000, "revolver_draw": 0, "revolver_repayment": 50000, "ending_cash": 446000, "revolver_balance": 200000, "total_liquidity": 846000, "covenant_min_liquidity": 500000, "covenant_headroom": 346000, "covenant_status": "pass" } ], "summary": { "lowest_cash_week": 4, "lowest_cash_amount": 285000, "total_receipts_13wk": 2100000, "total_disbursements_13wk": 1850000, "ending_cash_week13": 670000, "max_revolver_balance": 350000, "forecast_accuracy_target": 0.90 } } ``` --- ## Step-by-Step Workflow When a user asks for a 13WCF: ### Step 1: Intake ``` □ Opening bank balance (as of today, cleared) □ AR aging report (all open invoices) □ AP aging report (all open payables) □ Payroll schedule (dates and amounts) □ Loan schedule (debt service dates) □ Known large one-time items (rent, tax payments, CapEx) □ Credit facility details (limit, outstanding, borrowing base) □ Minimum cash threshold (management target or covenant) □ Any known collection risks (disputed invoices, slow customers) ``` ### Step 2: Build Collections - Map each AR invoice to expected collection week - Apply probability haircuts for aging invoices - Add new sales pipeline if known ### Step 3: Build Disbursement Schedule - Fixed: map every recurring payment to exact week - Variable: apply AP aging + payment priority to determine pay weeks - One-time: calendar all known lumpy items ### Step 4: Assemble Model - Week-by-week table: beginning cash → receipts → disbursements → ending cash - Add revolver mechanics if applicable - Calculate total liquidity and covenant positions ### Step 5: Stress Test - What if collections are 20% lower than forecast? - What if a large customer (>15% of receipts) delays 2 weeks? - What if payroll increases 10% (bonus, new hire)? - Identify the "cliff" week — when does cash hit the minimum? ### Step 6: Management Actions Based on the forecast, identify levers: ``` If cash tight in Week 3-4: - Accelerate collections: offer 2% early pay discount - Stretch AP Tier 2 vendors by 2 weeks - Draw $50k from revolver - Defer non-critical CapEx If cash comfortable: - Repay revolver to reduce interest - Build minimum cash cushion - Pre-pay Tier 1 vendors for relationship / discount ``` ### Step 7: Deliver - Formatted weekly table - Variance actuals block (if rolling update) - Covenant dashboard - Top 3 risks and management actions --- ## Example Usage **User:** "We need a 13-week cash flow. We have $380k in the bank, $210k in AR (mostly net 30), payroll of $85k bi-weekly, rent $18k first of month, and a $500k revolver at 60% drawn. Minimum cash covenant is $150k." **Sam's response:** ``` 13-Week Cash Flow — Starting Week of 3/16/2026 Opening Cash: $380,000 | Revolver: $300k drawn / $200k available | Covenant: $150k minimum QUICK SNAPSHOT: Lowest cash point: Week 3 (pre-payroll week) at ~$195k — $45k above covenant Revolver: Recommend drawing $50k at Week 3 to build cushion to $245k Collections: $210k AR should convert ~$180k over weeks 1-4 (net 30 timing) WEEKLY SUMMARY: Wk 1: Beg $380k | Receipts $95k | Disb ($88k) | End $387k Wk 2: Beg $387k | Receipts $60k | Disb ($108k) | End $339k ← payroll + rent Wk 3: Beg $339k | Receipts $85k | Disb ($90k) | End $334k Wk 4: Beg $334k | Receipts $55k | Disb ($108k) | End $281k ← payroll + rent ... Wk 13: Projected ending ~$310k | Revolver same or better KEY RISKS: 1. If top customer (accounts for ~$80k AR) delays 2 weeks → Week 4 cash drops to ~$195k, barely above covenant 2. Any unexpected >$30k expense in weeks 2-4 hits covenant RECOMMENDED ACTIONS: - Call top AR customer now — confirm payment timing - Pre-approve $75k revolver draw to trigger if needed (don't draw yet) - Hold AP Tier 2 payments in weeks 2-4 until AR clears Want me to build out all 13 weeks in full detail with the complete disbursement schedule? ``` --- ## Integration Points - **`startup-financial-model`** — Long-range context for the 13WCF (is the business structurally viable?) - **`kpi-alert-system`** — Set automated alerts when ending cash < covenant + $50k buffer - **`qbo-automation`** — Pull AR/AP aging and bank balances directly from QuickBooks - **`ar-collections-agent`** — Coordinate with collections workflow to improve receipt timing - **`report-generator`** — Format 13WCF into lender-ready PDF package --- ## Reference: Key Formulas ``` Net Cash Flow = Total Receipts - Total Disbursements Ending Cash = Beginning Cash + Net Cash Flow ± Revolver Activity Total Liquidity = Ending Cash + Available Revolver Capacity Covenant Headroom = Total Liquidity - Covenant Minimum Borrowing Base = Eligible AR × Advance Rate (typically 80%) Available Revolver = Borrowing Base - Outstanding Balance Collection Efficiency = Actual Collections / Forecasted Collections × 100 DSO (Days Sales Out.) = AR Balance / (Revenue / 90 days) DPO (Days Pay. Out.) = AP Balance / (COGS / 90 days) Cash Conversion Cycle = DSO + DIO - DPO ```


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