The 12-week Cash Forecast: Your Liquidity Radar
By Kirk W. McLaren
A rolling 12‑week view is the most practical horizon for liquidity control and action windows.
Why So Many CEOs Feel Like Cash is Playing Tricks
I’ve lost count of how many CEOs have told me the same story:
“Sales are strong. The P&L looks fine. But cash feels tight. Some weeks we’re flush, other weeks I’m worried about payroll. What gives?”
This is what I call cash whiplash—the disorienting mismatch between reported profit and actual liquidity. It happens because most companies don’t look at cash timing with enough precision.
You can have a growing business and still run out of cash if collections lag, vendors press harder, or growth investments eat more capital than expected. In The Growth CFO Void, I argued that this is one of the most dangerous blind spots for mid-market CEOs. And the fix isn’t complicated. It starts with a tool many firms overlook: the rolling 12-week cash forecast.
Why 12 Weeks Works
Why not just use a monthly budget? Or an annual cash plan?
Because both are too blunt. Budgets look backward. Annual forecasts assume the world behaves neatly. But cash never flows neatly. Payroll hits every two weeks, vendors want terms, tax payments show up in lumps.
A 12-week view—roughly one quarter—hits the sweet spot:
Long enough to see obligations coming (taxes, loan payments, seasonal swings).
Short enough to be accurate if updated weekly.
Actionable: it gives you a 90-day runway to adjust before a crunch hits.
Treasury studies back this up. GTreasury’s 2023 liquidity survey found that firms using rolling short-term forecasts reported fewer liquidity surprises and higher decision confidence. PKF O’Connor Davies calls the 12-week tool “the gold standard” for private companies trying to balance growth with control.
Building Your Liquidity Radar
Here’s how to put it into practice:
Start with beginning cash – what’s in the bank today.
Add inflows – expected collections, but tie them to actual payment behavior, not just invoice dates.
Subtract outflows – payroll, rent, debt service, vendors, taxes.
Update weekly – roll forward one week at a time so you always have 12 weeks visible.
Review variances – compare forecast vs. actual; flag anything off by more than ~5%.
Trigger actions – if collections slip, escalate calls; if payables are flexible, adjust terms; if growth spending will tighten liquidity, plan funding early.
The forecast is less about the spreadsheet and more about the discipline. Done right, it becomes your “radar”—showing you trouble three months out instead of three days out.
A Client Story
One $25M services company I worked with had never used a rolling forecast. Cash seemed fine until suddenly they were dipping into their credit line every other month. When we installed the 12-week model, the problem was clear: collections were running 12 days slower than assumed, while payroll kept climbing with new hires.
By seeing the timing mismatch, leadership tightened collections, adjusted payment terms with vendors, and delayed one expansion hire. Within 90 days, they had stabilized $1.2M in liquidity without cutting growth plans.
That’s the power of visibility.
Why This Matters for CEOs
The close of the books tells you what already happened. The budget tells you what you hope will happen. But the 12-week cash forecast tells you what’s about to happen—and gives you the window to act.
In my experience, once CEOs get used to having this radar, they never go back. It’s the difference between guessing and steering.
👉 Start your ROI Audit. Don’t let cash whiplash dictate your decisions. Put the radar in place, and lead with clarity.
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