A 13-week forecast lists cash in and cash out by week and shows where the balance runs thin. In the invented fabrication shop example, a steel buy in week 4 and a customer payment in week 10 leave a gap in between, and a $4,400 line draw covers it.
How an Iberia Parish, LA machinery repair shop can prepare a cash flow forecast
For an Iberia Parish, LA machinery repair shop, a cash flow forecast is a table of cash, not a projection of profit: money in, money out and the balance at the end of each week.
- Start from today's bank balance, not last month's statement.
- List customer payments in the week each one is due, from real invoice dates; leave out work not yet billed.
- Put payroll on its actual paydays; a biweekly payroll lands in every other week.
- Add rent, utilities, insurance and loan or advance payments on their due dates.
- Enter large one-off costs, such as a parts order or a machine deposit, in the week they go out.
- Pick a cash cushion the shop does not want to go under, and mark every week that falls short of it.
Building a 13-week cash flow forecast at an Iberia Parish, LA fabrication shop
Illustration only, invented figures: an Iberia Parish, LA fabrication shop opens the forecast with $18,000 in the bank. Its biweekly payroll of $7,800 falls in weeks 1, 3, 5, 7, 9, 11 and 13. Week 4 carries $15,600 of other payments, chiefly steel for one large job, and the customer pays $24,800 for that job in week 10. The cushion the owner wants is $5,000.
| Week | Opening cash | Customer receipts | Payroll | Other payments | Closing cash |
|---|---|---|---|---|---|
| Week 1 | $18,000 | $7,400 | $7,800 | $3,100 | $14,500 |
| Week 2 | $14,500 | $6,900 | $0 | $2,800 | $18,600 |
| Week 3 | $18,600 | $7,800 | $7,800 | $3,300 | $15,300 |
| Week 4 | $15,300 | $6,600 | $0 | $15,600 | $6,300 |
| Week 5 | $6,300 | $7,200 | $7,800 | $2,900 | $2,800 |
| Week 6 | $2,800 | $5,900 | $0 | $3,000 | $5,700 |
| Week 7 | $5,700 | $6,400 | $7,800 | $3,200 | $1,100 |
| Week 8 | $1,100 | $6,100 | $0 | $2,700 | $4,500 |
| Week 9 | $4,500 | $7,000 | $7,800 | $3,100 | $600 |
| Week 10 | $600 | $24,800 | $0 | $2,900 | $22,500 |
| Week 11 | $22,500 | $7,300 | $7,800 | $3,300 | $18,700 |
| Week 12 | $18,700 | $6,800 | $0 | $2,800 | $22,700 |
| Week 13 | $22,700 | $7,500 | $7,800 | $3,000 | $19,400 |
In this invented example the balance never drops to zero in the 13 weeks, but it falls under the $5,000 cushion in weeks 5, 7, 8 and 9, with its low point at $600 in week 9. A $4,400 draw on a line of credit in week 5 would hold every closing balance at $5,000 or more through week 9, before interest, and the week 10 payment could pay the draw back down.
How New Iberia, LA machine and fabrication shops can improve cash flow before borrowing
Before borrowing, a New Iberia, LA machine or fabrication shop can look at its own billing first. Changes that can shorten the time between paying out and getting paid:
- Bill on delivery instead of at month end.
- Take a deposit on large jobs before the steel for them is bought.
- Bill long jobs in stages as each stage is finished.
- Follow up on past-due invoices every week, with one person responsible.
- Buy material against a signed purchase order, not ahead of one.
- Sell or rent out machines that sit idle.
None of these pays for a new machine, but they can shrink the amount a working capital request has to cover. The working capital page explains that product.
Articles for New Iberia, LA fabrication shops, auto shops and restaurants
One funding question per article, answered with Iberia Parish Census figures or with numbers marked as invented. The topics:
- Welders, press brakes and a second CNC for a fabrication shop
- Dealer, bank or equipment lender for heavy shop equipment
- Auto shop financing, from scan tools to buying a shop
- Equipment loan, credit line or card-sales advance for a restaurant
- How a working capital loan works while an invoice is out
- Pledged equipment, blanket liens and unsecured loans
Each funding product the articles mention is laid out on the business loans page.
By Marbleline Business Loans · Updated