Construction is a cash-intensive business. You pay your trades, your suppliers, and your crew long before your client pays you — and holdbacks mean you might wait 60 to 90 days after project completion to collect the last of what you're owed. In that environment, running out of cash isn't a sign of a bad business. It's a sign of poor visibility.
The 13-week cash flow forecast is the single most effective tool for fixing that visibility problem. Here's what it is, why it works, and how to build one.
What Is a 13-Week Cash Flow Forecast?
A 13-week forecast is a rolling, week-by-week projection of every dollar coming in and every dollar going out over the next three months. Unlike an annual budget, which is static and quickly goes stale, the 13-week forecast is updated weekly — meaning it always reflects your current reality.
Thirteen weeks is the sweet spot: long enough to see trouble coming with enough time to act, short enough that your projections are grounded in real data rather than guesswork.
The goal isn't accuracy to the dollar. The goal is to see a cash squeeze two or three weeks before it happens — when you still have options.
What Goes Into It
Cash Inflows
- Progress billings expected to be collected by week
- Holdback releases from closing jobs
- Any other receivables with known collection dates
- Draws on a line of credit (if applicable)
Cash Outflows
- Payroll (including source deductions and remittances)
- Subcontractor payments by scheduled due date
- Material supplier invoices by due date
- Equipment lease and rental payments
- Overhead: rent, insurance, utilities, software
- CRA installments and HST/GST remittances
- Loan or line of credit repayments
A Simple Structure
Your 13-week forecast doesn't need to be fancy. A well-maintained spreadsheet is often better than a complex system, because it forces you to think through each line item every week. Here's the basic structure:
Opening Cash Balance → $142,000 → $118,500 → $94,200
+ Collections (AR) → $85,000 → $62,000 → $110,000
− Payroll → ($48,500) → ($48,500) → ($48,500)
− Subcontractors → ($32,000) → ($18,000) → ($55,000)
− Materials & Overhead → ($28,000) → ($19,800) → ($22,000)
Closing Cash Balance → $118,500 → $94,200 → $78,700
What you're looking for is any week where the closing balance dips uncomfortably low — or worse, goes negative. That's your early warning signal.
The Weekly Ritual
The forecast only works if you update it. Set aside 30 to 45 minutes every Monday morning to:
- Record actual cash in and out from the prior week
- Update collection expectations based on current AR aging
- Add any new payables or commitments that came up
- Roll the forecast forward one week
- Flag any weeks in the next four to six weeks where the balance looks thin
That last step is the whole point. If week seven looks tight, you have six weeks to do something about it: accelerate a billing, extend a payable, draw on your line, or have a conversation with a client about timing.
Common Mistakes to Avoid
Forecasting revenue recognition instead of cash. Your P&L might show revenue when you bill — but cash only lands when your client pays. Use actual expected collection dates, not invoice dates.
Forgetting remittances. Payroll source deductions, HST/GST remittances, and corporate tax installments are large, predictable outflows that contractors frequently underestimate until the CRA statement arrives.
Only looking at it when something feels wrong. The whole value of this tool is the early warning it provides. By the time something feels wrong, you often have far fewer options.
Want us to build this for you?
We set up and maintain 13-week cash flow models for construction clients as part of our ongoing accounting work.
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