A 13-week cash flow forecast lists, week by week for the next quarter, the cash you expect to come in, the cash you expect to go out, and the bank balance at the end of each week. You update it every week. For a contractor it answers the question your profit and loss statement can’t: will there be enough money in the account on the Friday payroll is due?
Growth makes that question harder. A new crew, a bigger job or a new truck costs cash weeks before it brings any in. This lesson shows how to build the forecast, a worked example of adding a crew, and how to use it to decide when and how to grow.
Why profit isn’t cash
A job can be profitable and still leave you short for weeks. You pay the crew every week, buy materials before the job starts and pay suppliers on their terms. The customer pays at milestones, at the end, or 30 days after the invoice.
A profitable business can still run out of cash in the gap. How to stop funding your clients’ renovations covers how to make that gap smaller with deposits, payment schedules and supplier terms, plus a quick weekly cash check. The 13-week forecast is the next step: it shows the gap before it happens, so you can plan around it.
Why 13 weeks
Thirteen weeks is one quarter. It’s long enough to catch the things that sink a month: a quarterly tax payment, a slow season, a big job’s materials, the weeks before a new crew’s first payment. It’s short enough that you can forecast by week with real information: signed jobs, scheduled work, known bills. Beyond three months, a week-by-week forecast turns into guesswork.
What goes in the forecast
One row per line, one column per week:
| Line | What goes in it |
|---|---|
| Opening balance | Cash in the bank at the start of the week (week 1: today’s real balance) |
| Cash in: deposits | Deposits on signed jobs, in the week you expect them |
| Cash in: progress and final payments | Each job’s payments, timed to its schedule and to when that customer actually pays |
| Cash in: other | Service agreements, recurring work, anything else |
| Cash out: payroll | Wages and payroll taxes, on your pay dates |
| Cash out: materials and suppliers | Timed to when each job needs them and when you pay the supplier |
| Cash out: subcontractors | On the terms you’ve agreed with each one |
| Cash out: fixed costs | Rent, insurance, vehicles, software, phones, loan payments |
| Cash out: taxes and owner draws | Estimated tax payments, sales tax, what the owner takes out |
| Net cash flow | Cash in − cash out |
| Closing balance | Opening balance + net cash flow; it becomes next week’s opening balance |
| Minimum balance | The lowest balance you’re willing to run at |
How to build it
- Start with today’s bank balance. Not what you think you have. The real number.
- Add cash in from signed work only. Take each signed job’s payment schedule and put each payment in the week you expect the money, not the week you’ll invoice. If a customer usually pays ten days after the invoice, put it ten days later. Proposals that aren’t signed yet stay out of the forecast, or go in a separate “likely” line that isn’t added to the balance.
- Add payroll on your pay dates, including payroll taxes.
- Add job costs where the schedule puts them. Materials before the job starts, subcontractors on their terms. Your schedule and your cash forecast should tell the same story.
- Add fixed costs, taxes and owner draws on their due dates. Mark the big ones: quarterly taxes, insurance renewals, annual software or equipment payments.
- Set your minimum balance. There’s no standard number. Pick the cushion that lets you sleep, for example two payrolls plus a month of fixed costs, and see which weeks fall below it.
- Update it every Friday. Replace last week with what actually happened, add a new week 13, and look at what moved.
Step 7 is the one that makes the forecast useful. After a few weeks, the misses tell you which customers pay late, which jobs start later than planned and which costs you keep forgetting.
Example: adding a third crew
A contractor with two crews plans to add a third. The new crew starts in week 3, with a truck down payment and tools in week 2. Their first job pays a progress payment in week 7. All numbers are made up to show the method. The minimum balance is $40,000.
| Week | Cash in | Cash out | Net | Closing balance | Notes |
|---|---|---|---|---|---|
| Opening | $62,000 | ||||
| 1 | $31,000 | $29,000 | +$2,000 | $64,000 | |
| 2 | $24,000 | $41,000 | −$17,000 | $47,000 | Truck down payment $8,000, tools $3,000 |
| 3 | $28,000 | $35,500 | −$7,500 | $39,500 | New crew payroll starts: below the minimum |
| 4 | $22,000 | $36,000 | −$14,000 | $25,500 | Materials for the new crew’s first job |
| 5 | $30,000 | $34,000 | −$4,000 | $21,500 | |
| 6 | $26,000 | $37,500 | −$11,500 | $10,000 | Quarterly estimated tax: the low point |
| 7 | $41,000 | $34,000 | +$7,000 | $17,000 | New crew’s first progress payment |
| 8 | $38,000 | $33,000 | +$5,000 | $22,000 | |
| 9 | $44,000 | $35,000 | +$9,000 | $31,000 | |
| 10 | $39,000 | $34,000 | +$5,000 | $36,000 | |
| 11 | $46,000 | $36,000 | +$10,000 | $46,000 | Back above the minimum |
| 12 | $40,000 | $34,000 | +$6,000 | $52,000 | |
| 13 | $43,000 | $35,000 | +$8,000 | $60,000 |
By week 13 the balance is almost back where it started, and rising. But for eight weeks it sits under the minimum, and in week 6 it’s down to $10,000, less than a third of a normal week’s costs. One customer paying two weeks late in that stretch and payroll is at risk.
The forecast lets the owner change the plan before the crew starts, not in week 6:
- Spread the truck cost. Financing or leasing the truck instead of an $8,000 down payment, at an assumed $900 a month.
- Take a deposit on the new crew’s first job. A $9,000 deposit in week 3, where your state’s rules allow it. See contractor deposit laws by state.
Together those raise the week 6 low point from $10,000 to about $26,000 (one lease payment falls before week 6, and the deposit is credited against the job’s final payment, after week 13). That’s still under the $40,000 minimum, so the owner also talks to their bank about a line of credit now, while the numbers look good, rather than in the middle of the dip. Another option would be to start the crew two weeks later, after two large final payments come in.
When to run the forecast
Keep it every week, and look hardest at it before any decision that spends cash before it earns it:
- adding a crew or a salaried hire
- buying a vehicle or equipment
- taking a large job with long payment terms or big upfront materials
- going into your slow season
- a large tax payment or insurance renewal
The question is always the same: what does this do to the lowest balance in the next 13 weeks?
Common mistakes
- Using invoice dates instead of payment dates. Cash arrives when customers pay, not when you bill.
- Counting proposals as cash. Only signed work goes in.
- Forgetting the lumpy costs: quarterly taxes, insurance, annual renewals, equipment repairs.
- Building it once. A forecast that isn’t updated weekly is out of date by week 2.
- Leaving out owner draws. If the owner takes money out, it’s cash out.
Your next action
- Build the forecast for the next 13 weeks: today’s balance, signed work by expected payment week, payroll, job costs, fixed costs, taxes and draws.
- Set your minimum balance and mark every week that falls below it.
- Update it this Friday and every Friday after.
- Before your next growth decision, add it to the forecast and look at the low point.
Free tool: the 13-Week Cash Flow Template spreadsheet carries each week’s closing cash into the next and shows your low point.
What to review each week:
- The lowest balance in the next 13 weeks, and the week it happens
- Last week’s forecast vs. what actually happened
- Customers whose payments arrived later than forecast
Next lesson: build a monthly KPI scorecard to choose better work and review results.
Where MotionOps helps
MotionOps doesn’t build the forecast for you, but it gives you the numbers that go into it and helps bring cash in sooner:
- Deposit Payments: collect deposits before work begins; they’re applied to the final invoice automatically.
- Partial Payments and Recurring Work Order & Invoices: let customers pay an invoice in parts, and set recurring payment schedules (weekly, monthly, quarterly or custom).
- Billing Metrics: see how many invoices are outstanding.
- Advanced Reporting: compare booked and collected revenue for the timeframe you select.
- QuickBooks Online: customers, invoices and payments sync automatically.
See plans and pricing, or book a MotionOps demo.
Contractor Scaler Hub: Grow Profit, Not Just Revenue, lesson 4 of 5
- Previous lesson: Margin Erosion in Construction: Where Profit Leaks Between Estimate and Invoice
- Next lesson: Essential KPIs Every Contractor Needs to Assess Monthly: A One-Page Scorecard
- Course toolkit: Grow Profit, Not Just Revenue toolkit (PDF)
- All courses and lessons: Contractor Scaler Hub
