A 13-week cash flow forecast is the fastest way for a parent company to see how long a Czech subsidiary can keep paying its bills. It is a simple weekly table of expected cash in and cash out for the next quarter. With it, a regional director or foreign owner can talk to the Czech bank and suppliers with real numbers instead of reassurances from the local team.
Why a 13-week cash flow forecast and not the annual budget
An annual budget works with profit, but bills are paid from cash. A subsidiary can show a profit in the group reporting pack and still be unable to pay wages, because customers started paying six weeks later than planned. Thirteen weeks is one quarter. That is long enough to capture VAT, advance tax payments and loan instalments, and short enough that every weekly estimate can be checked against what actually happened.
A forecast is useful beyond a crisis too. Subsidiaries that grow faster than they can finance stock, or that are about to make a large investment, use the same tool to see whether the cash will hold. The principle stays the same: see the money before the problem arrives and keep several options on the table.
In my experience, when I step into a company in trouble, the first thing I ask for is not the profit and loss account. It is the bank balance today and a list of what is due in the next three weeks. Only then can we tell whether there is time for a plan or only time for firefighting. We described the early signals in our article on insolvency warning signs in a Czech subsidiary.
How to build a 13-week cash flow forecast step by step
- Establish the real cash position. Add up balances on all accounts, cash desks and unused overdrafts. Count only money the company can actually use.
- Map receipts by invoice. Place every issued invoice in the week when the customer will really pay, not the week stated in the contract. The gap between contractual and real payment dates is usually the first big surprise.
- Add the payments that cannot wait. Net wages and social and health insurance contributions, VAT, advance tax payments, loan and leasing instalments, rent and energy. Delaying these has serious consequences.
- Rank everything else by importance. Suppliers without whom production stops come first. The decision on who gets paid first belongs to management, not to the bookkeeper.
- Calculate the weekly balance. Opening balance plus receipts minus payments gives the closing balance. Mark the first week in which the balance goes negative. Until then you have time to act.
- Compare the forecast with reality every week. Roll the forecast forward by one week so it always shows the next thirteen, and explain every significant variance.
What to include in the 13-week cash flow forecast
| Category | What to include | Review frequency |
|---|---|---|
| Receipts | Customer payments by actual payment date, advances, subsidies, asset sales | Daily check of incoming payments, weekly update |
| Payroll | Net wages, social and health insurance, payroll tax | Monthly ahead, weekly when headcount changes |
| Taxes | VAT, advance corporate income tax, road tax and others | According to the payment calendar |
| Financing | Loan instalments, leasing, interest, covenants | Weekly and before every bank meeting |
| Operations | Suppliers, materials, rent, energy, services | Weekly by priority |
| One-off items | Investments, severance, legal and advisory fees | Whenever a decision changes |
Typical situation: how the forecast changes decisions
Take a typical Czech manufacturing subsidiary with around a hundred employees. Sales are fine, but customers pay late and the local bank has tightened its terms. Without a forecast, the parent company only sees that there is less cash than before. With a 13-week forecast it sees that in week five wages, VAT and a loan instalment fall together and that the cash falls short by one to two monthly payrolls.
That is a decisive difference. Instead of a general worry there is a specific date and a specific amount. Management can ask the bank to defer the instalment before it falls due, agree shorter payment terms with the biggest customers or pause purchases of material that will not be used. Banks and suppliers are far more cooperative with a company that arrives with a plan than with one that asks for help on the day it cannot pay.
Common mistakes in a 13-week cash flow forecast
The most common mistake is optimistic receipts. The forecast then says everything will sort itself out and the company stops making the uncomfortable decisions. The second is mixing profit with cash: invoices that the customer will never pay end up in the forecast as income. The third is a forecast prepared only by the accountant. If management and sales do not own it, nobody acts on it.
Another mistake is poor rhythm. The forecast is built once, saved in a folder and out of date within a month. It only works if it is updated regularly and management really discusses the variances. I recommend a fixed weekly slot, for example Monday morning, and a one-page output. The last mistake is quiet: forgotten taxes and social contributions. A debt to the state grows slowly and nobody mentions it until a formal demand arrives. Include it from week one.
When to bring in an interim CFO or interim managing director
If nobody in the Czech subsidiary can build the forecast and, above all, enforce it every week, temporary reinforcement makes sense. An interim CFO can start quickly, take over payment discipline and negotiate with the bank as a person who carries responsibility for the numbers. When the problem is wider than finance, with decisions on people, customers and production missing, an interim CEO is usually the better fit. You can read more about the approach on our interim management page.
A forecast alone will not rescue a company. It does give you time and numbers for every next step, for instance for restructuring a loss-making Czech subsidiary. The earlier it exists, the more options remain.
FAQ
How often should I update a 13-week cash flow forecast?
Once a week, ideally on the same day as the payment run. In an acute crisis, when cash changes daily, add a short daily bank balance overview.
Who should prepare the forecast in a Czech subsidiary?
The finance director or chief accountant prepares it, but management owns it. Sales provides realistic customer payment dates and purchasing provides supplier priorities.
Is Excel enough?
Yes. Discipline and honest inputs matter more than the tool. A simple table with weeks in columns and payment groups in rows is entirely sufficient.
What should we do if the forecast shows a negative balance in two weeks?
Act immediately: talk to the bank and key suppliers, review customer advances and postpone all non-essential spending. If you are unsure about the procedure, do not wait, because every week leaves fewer options.
Need a forecast quickly?
If your Czech subsidiary has nobody who can build and run a 13-week cash flow forecast, get in touch. Big Interim can provide an interim manager who starts within two weeks. Contact Big Interim and we will go through the situation together.
