How to Build a Cash Flow Forecast from Xero (13-Week Method)
Xero tells you what has happened and what is already invoiced. A 13-week cash flow forecast tells you what will happen to your bank balance week by week. You build it from Xero data, then add what Xero does not know yet: payroll dates, tax payments, new deals and spend decisions.
Step 1: export the right reports
- Bank balances on the start date
- Aged receivables: who owes you and when it is due
- Aged payables: what you owe and when
- Repeating invoices and bills
- Last three months of payments by account, to estimate regular costs
Step 2: turn due dates into realistic dates
Customers rarely pay on the due date. Use each customer's real payment history to move receipts to the week they are likely to arrive. Do the same for suppliers you usually pay early or late.
Step 3: add what Xero does not know
- Payroll, PAYG withholding and superannuation dates
- BAS and GST payments in Australia, or VAT returns in Oman
- Rent, loans and annual subscriptions
- Expected new sales from your pipeline, with a probability
- Planned hires and spend decisions
Step 4: review it every week
Each week, replace the oldest forecast week with actuals from Xero, explain the differences, and roll forward one week. After a month you know which assumptions are wrong, and the forecast becomes reliable enough to make decisions on.
Templates and help
Download the free 13-week cash flow template and fill it from your Xero exports. If you want it built and maintained for you, a fractional CFO can set it up and run the weekly review.
Frequently asked questions
Xero shows invoices and bills already entered. A 13-week forecast also needs payroll, tax dates, pipeline and planned spend, which you add on top.
How often should I update it?Every week: replace the oldest week with actuals and roll forward.
Which Xero reports do I need?Bank balances, aged receivables, aged payables, repeating invoices and bills, and recent payments by account.
Is there a template?Yes, the free 13-week cash flow template on the templates page.
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Written by Akram El-Karrar, CPA, from the work we do for startups every week.