Introduction
Most SME cash crises are visible six weeks out. Here is how to build the view that shows them, and keep it current.
Why thirteen weeks
A quarter is long enough to see a problem forming and short enough that the numbers are still meaningful. Monthly forecasts hide within-month troughs — the week payroll and a large vendor payment land together — which is exactly when businesses actually run short.
What feeds it
A useful forecast draws on four live inputs: confirmed receivables with realistic collection dates, payables with their due dates, payroll and statutory obligations with fixed dates, and loan or EMI schedules.
The common failure is using invoice due dates as collection dates. If your average customer pays at seventy days against thirty-day terms, forecasting on terms produces a fiction. Use observed behaviour per customer.
Scenario modelling that is actually useful
Two scenarios matter more than a spread of ten. The first: what happens if your three largest receivables each slip by three weeks. The second: what happens if you take on the new order and have to fund the materials.
Both are decisions you can act on. Most other scenarios are entertainment.
Connecting the forecast to action
A forecast that nobody acts on is a report. The link that makes it operational is collections activity — when the forecast shows a trough in week seven, the response is to prioritise specific overdue accounts now, not to worry.
This is where the forecast and the receivables process need to be the same system. Reading a shortfall in one place and chasing invoices in another loses the connection.
Keeping it current
Any forecast maintained by hand decays. The version that survives is the one that rebuilds itself from live ledger data every morning, so nobody has to decide whether to update it this week.
In summary
None of this requires a transformation programme. It requires deciding where each piece of data is created, making sure it is only created once, and letting everything downstream read from that record instead of keeping its own copy.
Rahul Iyer, Principal Architect at easyto.work.
