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ACADEMY / BEGINNER / COURSE PREVIEW
Read a 13-week cash forecast and decide what to do before a shortfall becomes a missed payment. Four text lessons, a worked case and checks you can do now.
Fictional business and figures. Educational material, not individual financial advice. No enrollment or purchase is available.
After this lesson: Separate a sale, an invoice and a collected payment.
A sale may produce revenue before a customer pays. A business can also spend cash on stock, equipment or loan principal without putting the whole payment on the current period's profit-and-loss statement. A cash forecast therefore tracks dated bank movements: opening cash plus expected collections minus expected payments equals closing cash. It does not start with projected profit.
Harbor Supply opens with $18,000. Customers are expected to pay $8,000 in week one, while the business pays $12,000. Closing cash is $14,000. A $20,000 invoice created in that week is not an extra $20,000 of cash unless the customer actually pays it.
Choose which date matters to the cash forecast: delivery, invoice, or actual payment. Then check the example below.
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Model answer: Week four, if payment is reasonably expected then. Track the invoice separately in receivables; do not count it as week-one cash.
Watch for: An invoice is proof of a claim to collect, not proof that the bank balance has increased.
After this lesson: Build the first four weeks from opening cash, collections and payments.
List expected receipts by the week funds are likely to clear, not by the date a sale is booked. List payroll, rent, supplier payments, tax and debt payments by their actual due weeks. Begin each row with the previous week's closing cash. A forecast is an estimate; keep an owner, evidence and confidence level beside large uncertain receipts.
Weeks one and two close at $14,000 and $10,000. Week three opens at $10,000, collects $6,000 and pays $20,000. It closes at negative $4,000. The warning appears before the payment comes due, while there is time to act.
| Week | Opening | Collections | Payments | Closing |
|---|---|---|---|---|
| 1 | 18 | +8 | −12 | 14 |
| 2 | 14 | +10 | −14 | 10 |
| 3 | 10 | +6 | −20 | -4 |
| 4 | -4 | +12 | −10 | -2 |
| 5 | -2 | +14 | −12 | 0 |
| 6 | 0 | +11 | −13 | -2 |
| 7 | -2 | +13 | −13 | -2 |
| 8 | -2 | +15 | −12 | 1 |
| 9 | 1 | +12 | −14 | -1 |
| 10 | -1 | +14 | −13 | 0 |
| 11 | 0 | +13 | −14 | -1 |
| 12 | -1 | +16 | −14 | 1 |
| 13 | 1 | +15 | −13 | 3 |
Use the forecast below to spot the first week that falls below zero. Pick the closing balance in the interactive check.
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Model answer: Week three starts with $10,000 and has $6,000 incoming against $20,000 outgoing, leaving negative $4,000. Week four then starts at negative $4,000 and ends at negative $2,000.
Watch for: A positive year-end total cannot pay a week-three bill. Look at the timing and minimum balance, not just the final row.
After this lesson: Compare cash actions with realistic timing and trade-offs.
A shortfall is a decision signal, not a command to cut every expense. Check overdue invoices, timing of a stock purchase, supplier terms and available financing. Confirm each action is feasible and agreed to before adding it to the base forecast. Never assume a customer or supplier will change terms just because the spreadsheet needs it.
If an overdue $8,000 is collected in week three, that week's closing cash rises from negative $4,000 to $4,000. If a supplier also agrees to move $5,000 of week-three payment to week five, week three instead closes at $9,000. Week five then carries the deferred $5,000 payment; the obligation has moved, not vanished.
Compare two actions: collect an overdue invoice or defer a supplier payment. Select what each changes in the interactive check.
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Model answer: No. It changes the timing of cash; the supplier amount remains payable. The accounting treatment depends on the original transaction.
Watch for: Moving a bill to another week buys time but does not erase the bill.
After this lesson: Update assumptions and communicate an action-ready weekly forecast.
Each week, replace the previous week's forecast with the actual bank movement. Ask why collections or payments differed, roll the forecast forward one week, and update the next three months. Separate confirmed payments from hopeful estimates. A useful weekly review shows the lowest cash balance, the assumptions behind it and actions with accountable owners.
At the next review Harbor Supply learns that week-four collections will arrive one week late. Move that receipt into week five, recompute every later opening balance and tell the owner which obligations now lack coverage.
Look at a late customer payment and choose the correct forecast update in the interactive check.
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Model answer: Replace the forecast with the actual, move the receipt to a defensible new date, rerun later weeks and flag the risk. Do not leave the original receipt in place as if it arrived.
Watch for: A forecast is a decision tool that changes with evidence, not a promise that sales will turn into cash on schedule.
Base forecast minimum: $-4 thousand. Answer three selectable questions. Each has a worked explanation and a new version if you miss it. No typing or written submission is required.
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This beginner preview saves checks only in this browser; it does not create an enrollment, verified grade, or credential. Advanced courses may ask for a brief written recommendation of one or two sentences, alongside selectable checks and instructor review.
The explanation and fictional case are original Aim High Hero material. These external references are for verification and additional practice; their owners do not endorse this course.
FDIC Money Smart for Small Business — Managing Cash Flow ↗SCORE — 13-week cash flow analysis ↗