13-week cash flow vs. annual budget
An annual budget plans profit by month. A 13-week cash flow tracks cash by week. Learn why seasonal and project businesses need the weekly view.
An annual budget can say the year will be profitable while the business still runs short of cash in July. That is because budgets usually work in months and in accrual terms, recording revenue when it is earned rather than when the money arrives.
A thirteen-week cash flow forecast works in weeks and in cash. It is the tool for spotting the specific week when payroll, supplier payments, and slow collections collide.
13-week cash flow
A week-by-week projection of receipts, payments, and the cash balance for the next quarter, starting from today's actual bank balance. It is built from open receivables and payables, payroll schedules, and dated commitments, and it is updated every week.
Annual budget
A month-by-month plan of revenue, expenses, and profit for the fiscal year, adopted as a target. It may include a cash view, but it rarely captures the timing of individual receipts and payments within a month.
Side by side
| Factor | 13-week cash flow | Annual budget |
|---|---|---|
| Unit of time | Weeks | Months |
| Basis | Cash in and out | Usually accrual: revenue earned, expenses incurred |
| Horizon | The next 13 weeks | The fiscal year |
| Update frequency | Weekly | Once a year, with occasional revisions |
| Best at | Spotting short-term shortfalls and timing problems | Setting targets and evaluating performance |
| Built from | Bank balance, open invoices and bills, payroll, dated commitments | Strategy, prior-year results, growth assumptions |
Choose 13-week cash flow when
- Your cash swings with seasons, draws, or large customer payments.
- You are close to the limit of a credit line.
- A lender or adviser has asked for a short-term cash forecast.
Choose annual budget when
- You are setting targets for the coming year.
- You need a benchmark to judge performance against.
- You want to plan headcount and investment at a high level.
The bottom line
The budget tells you whether the year works. The 13-week cash flow tells you whether next month works. Seasonal businesses such as farms, project businesses such as contractors, and associations with renewal seasons get the most from adding the weekly view. Try the 13-week cash runway calculator for a quick first look.
Still deciding?
Bring the decision to a short call. We will tell you which option we would choose in your position, and why.