Managing Your Cash in a Crisis: And How A 13-Week Cash Forecasting Model Helps

The first instinct when a crisis hits is to hope it blows over.

I saw it with COVID. Businesses in early 2020 were saying "let's just wait and see, it'll sort itself out in a few weeks." And then the lockdowns came and suddenly there was no time to prepare. Only time to react.

I've had the same feeling reading the news about the Iran war and the closure of the Strait of Hormuz.

Even in the most optimistic scenario, if everything was resolved tomorrow, the supply chain damage already done is going to take months to unwind. Oil above $100 a barrel. LNG exports from Qatar effectively halted. Helium shortages threatening semiconductor and medical device supply chains. Fertilizer prices spiking. Shipping traffic through the Strait down 97%. And the Houthi situation in the Red Sea adding yet another pressure point.

This isn't doom and gloom. It's just the picture as it currently stands.

And if you're a CFO, treasury manager, or finance professional responsible for keeping a business solvent through this - you need to be thinking about one thing above everything else: cash flow visibility.

I'm not here to predict how this plays out. But I can help you think about how to prepare your business for a range of scenarios, and what actions you should be taking right now to preserve your cash position.

That's what this post is about.

I've seen this before

In February 2020, I was working with a private equity-backed business to build a 13-week cash flow forecast. This wasn't a distressed business - it was profitable. But it had a seasonal liquidity pinch point every year. It built up inventory in the winter and sold it in the summer, which meant it always hit a period where cash got tight. The business wanted better visibility over that pinch point so it could manage through it more confidently.

We finished the forecast. And then COVID hit.

Almost immediately, that 13-week cash flow forecast went from a useful planning tool to an absolutely essential survival tool. We were updating it weekly, sometimes daily, pulling forecasting inputs from 15 business units across 15 different countries. The picture it was showing us was uncomfortable: the business was expected to run out of cash before the seasonal recovery kicked in.

The first version of any forecast is going to be wrong. We had line items we'd missed. Some weeks more cash went out than we'd predicted. Other weeks more came in. But the more frequently we updated it, the more accurate it got. And critically, the clearer the picture became - not just for us, but for the business unit leaders who were providing the inputs. They got better at forecasting what was coming in and going out of their patch.

Eventually, the picture stabilised. And what we could see is that the business was going to just about squeeze through, without needing to raise more money from its private equity owners or its lenders. That was a massive outcome. It preserved the equity value of the investment. And then when the construction boom came in late 2020 and into 2021, the business did fantastically well.

Without that level of cash flow visibility, they would've been flying blind. Every decision (how much to pay down, who to call, whether to raise capital) would've been guesswork.

That's the parallel I keep coming back to when I read the news right now.

What is a 13-week cash flow forecast?

If you already know, skip ahead. But it's worth being clear on what we're actually talking about.

A 13-week cash flow forecast (what's often called a 13WCF) is a direct cash flow forecast that looks 13 weeks into the future and tells you, at a line-item level, what cash is coming in, what's going out, and what you're going to be left with at the end of each of those 13 weeks.

The key word there is direct. Unlike the indirect method you see in annual reports, which works backwards from P&L and balance sheet, a direct forecast shows you exactly what's driving your cash flows. Which customers are paying. Which suppliers you're paying. Which entities have surplus cash and which are going to hit zero.

It's a completely different level of visibility.

Depending on your situation, you might use this type of forecast for different reasons. If you're in distress and negotiating with lenders, it's your primary tool for demonstrating financial runway and getting breathing room - interest holidays, deferred capital repayments, or restructuring support.

If you're a healthy business with seasonal pinch points, it gives you the visibility to manage through them. If you're a treasury function across multiple entities, it tells you which accounts will have enough cash to make specific payments and where excess cash needs to be swept back to the group.

Different businesses. Same fundamental tool.

Building your 13-week cash flow forecast

One of the most common misconceptions I come across is that you can just take a standard template, plug in your numbers, and you're done. Or that you can buy a software platform and it'll do the work for you.

I'm not dismissing templates or software - I give away a free template myself, and some platforms are genuinely impressive. But here's the truth: the right 13-week cash flow forecast for your business is the one that's built specifically for your business.

Your forecasting methodology is going to depend on your setup: how many entities you have, what ERP systems you're running, whether you sell on credit or collect at point of sale, whether you're project-based, what your supply chain looks like. A one-size-fits-all approach breaks down almost immediately when you try to apply it to a real business.

My strong recommendation, especially in a crisis, is to start with Excel. It's flexible, you can get it running in a day or two, and you can adapt it as the situation evolves. Graduate to a more sophisticated platform once things have stabilised and you've got the data and processes in place to support it. Don't try to implement an enterprise software solution when you need answers this week.

Step 1: Gather your data and determine your forecasting methodology

Operating receipts

If you sell on credit, your accounts receivable ledger is your starting point. Unwind it based on invoice due dates - that's when you're predicting cash will land. If you have good data on how your customers actually pay (not just when they're supposed to), use it. Historical payment behaviour by customer is worth doing the analysis on. Habitual late payers should have those extra days layered on top of their due dates.

For overdue receivables (invoices where the due date has already passed) you need promise-to-pay dates. If you're not recording these in your ERP, start today. Pick up the phone, ask your customers when they're going to pay, and log it.

Sales orders are your next layer. If customers are raising purchase orders with you, take the expected shipment date as the invoice date, add the customer's payment terms, and you've got an expected cash collection date. Combine this with your AR analysis and you're typically covered out to around week eight of a 13-week cash flow.

Beyond that, you're forecasting cash from sales that haven't happened yet - and that means leaning on your commercial forecast. Just be careful not to double-count sales that have already been made as orders. Take the commercial forecast for the period, subtract what's already in sales orders, and the remainder is your predicted new sales. Apply your average payment terms (or customer-specific terms if your forecast is detailed enough) to get the expected cash dates.

If your business doesn't operate on credit (retail, project-based, subscription) the classic AR methodology falls apart. You'll need to work closely with your commercial team or project managers to translate activity into expected cash timings. It's more manual, but it's the right approach.

Operating payments

Mirror image of operating receipts. Unwind your accounts payable and purchase orders the same way, this time forecasting cash going out to suppliers.

Salary costs are typically your largest operating payment. If they're relatively stable, roll forward from history. If they vary (seasonal headcount, commission structures, overtime) work with HR to get a schedule. And don't forget payroll taxes, which often land on a different cycle to the salary payments themselves.

Other operating costs (IT, property, professional fees, marketing) tend to be recurring and relatively predictable. Roll them forward, but flag anything that's variable and needs a different approach.

Capital expenditure

CapEx is where I see businesses consistently struggle. A CapEx budget set in January rarely reflects when the cash actually goes out. You need a proper CapEx tracker: project by project, showing the total budget, what's been spent, what's committed, and the forecast cash timings as provided by your project managers or site teams. Without this, your forecast will have holes in it.

Financing cash flows

If your debt structure is straightforward, an amortisation schedule overlaid onto your forecast is usually sufficient. Where it gets interesting is if you're starting to struggle with debt service. This is where the 13-week cash flow forecast becomes your most important tool for lender conversations.

The moment you signal to your lenders that you're experiencing liquidity challenges, the first thing they'll ask for is a short-term cash flow forecast. If you can't produce one quickly and reliably, it's a massive red flag. It puts you on the back foot at exactly the moment you need to be in control. Build flexibility into your financing model so you can run scenarios (interest holidays, deferred amortisation, covenant headroom) and show lenders what each option does to your liquidity position.

Opening and closing cash

One point that trips people up: your opening cash position should be your opening book balance, not your bank balance. If you use the bank balance, you risk double-counting receipts that have already hit your account but haven't yet been allocated against the open invoice in your ledger. Use the book balance, and make sure your bank reconciliations are being done promptly. If you're weeks behind on reconciliations, you may only be able to do this properly at month end - which in a crisis is too slow.

Finally, don't confuse closing cash with closing liquidity. If you have an undrawn revolving credit facility, that's available liquidity. If you have cash ring-fenced for taxes or other committed purposes, that's not. Your closing liquidity number should reflect what's actually accessible to the business.

Step 2: Build the model

For a business with multiple entities, you've got two main options: a centralised model owned by one person who gathers inputs from across the business, or a decentralised model where a standard template is distributed to local finance managers who complete their own inputs and return them for consolidation. For a simpler single-entity business, one model does the job.

My recommendation in a crisis: centralise as much as possible, keep it in Excel, and keep it simple enough that it can be updated quickly.

Step 3: Run it - and actually use it

How often you update your forecast depends on your situation. In a crisis, I'd be updating it at least weekly. The more frequently you run it, the more accurate it gets - because you're constantly checking actuals against what you predicted and tightening your methodology. It also forces all the non-finance stakeholders who contribute inputs to sharpen their pencils.

One thing I always see when businesses start running this type of forecast: they learn something they didn't know. In one business I worked with, we kept hitting unexplained variances in certain weeks. When we dug into it, we found large customer rebate payments that nobody had flagged to the finance team. The data was scattered across PDFs and email chains with no central structure. We had to build a rebate tracker from scratch just to get visibility over what was going out.

That kind of discovery is only possible if you're running the forecast consistently and comparing it to actuals every week.

Three scenarios you need to model right now

I can't tell you how the situation in the Middle East is going to play out. But what I can tell you is that every finance team should be stress-testing their cash flows against at least three macro scenarios right now.

Before getting into the scenarios themselves, it's worth briefly looking at what's already happening, because this is the baseline you're stress-testing from.

What we're already seeing:

• Oil has gone from ~$72 per barrel pre-conflict to above $100, with a peak of ~$120. Pre-conflict forecasts had it falling to $58–60 in 2026 due to structural oversupply.

  
  

• Qatar produces about a fifth of the world's LNG. With the Strait of Hormuz closed, nearly all of its exports have been halted. The Qatari energy minister has already warned that 17% of capacity will be out of service for three to five years. Force majeure has been declared on long-term contracts.

  
  

• 33% of the world's seaborne helium passes through the Strait. Helium is essential for semiconductor manufacturing and MRI machines, the magnets need to be kept at specific temperatures, and helium is what does it. If this continues, semiconductor and medical device supply chains are going to feel it.

  
  

• One third of the world's seaborne fertilizer trade passes through the Strait. Nitrogen-based fertilizer prices have spiked, and food supply impacts are coming.

  
  

• A quarter of the world's seaborne aluminium passes through the Strait. Smelters are already closing and declaring force majeure. Full restart timelines are being quoted at six to twelve months.

  
  

• Shipping traffic through the Strait dropped by 97% in March, from ~138 vessels a day to almost zero. Insurance premiums for vessels willing to attempt the passage have risen sharply; some have had cover pulled entirely. The Houthi situation in the Red Sea adds further pressure on alternative routes.

  
  

• Airlines are facing jet fuel supply guarantees that extend only three to four weeks out. Asian airlines are worst affected, but European carriers are also dealing with return-journey concerns. Air freight costs are moving accordingly.

That's the baseline. Now the scenarios.

Scenario 1: V-shaped recovery (3 – 6 months of disruption)

This assumes the situation resolves relatively quickly - a sharp crisis that peaks and then recovers. Even in this scenario, you're looking at three to six months of supply chain disruption before things start normalising. That's the minimum.

Modelling this scenario isn't something finance can do alone. You're going to need procurement to give you the latest on raw material costs. You'll need logistics to tell you what's happening to shipping times and costs. You'll need your commercial team's read on how demand is being affected.

The four things you need to model:

1. Input price increases: raw materials, logistics, energy costs going up

   
   

2. Delays in sourcing: shipping times are longer, which affects when you can produce and sell

   
   

3. Supply shortages: some inputs may simply not be available in the short term, which affects your ability to sell

   
   

4. Revenue impact: whether you're losing customers who can no longer afford your products, or you physically can't produce them, or you're seeing a short-term spike in demand that will normalise on recovery

If demand for your products is actually increasing due to the crisis, model a spike and then a normalisation, don't plan to a permanently elevated baseline.

Scenario 2: Prolonged disruption (approximately 12 months)

Same assumptions as scenario one, but stretch the timeline. In this scenario, you're living with these disruptions for a year.

The goal here isn't to immediately identify countermeasures. It's to understand what this does to your liquidity over a twelve-month period, put it alongside scenario one, and assess what your options are if this plays out.

Scenario 3: Stagflationary environment (24 – 36 months)

This is the scenario nobody wants to run but everyone should. Input prices rising further. Ongoing shipping disruptions. Supply shortages persisting. Revenues and profitability in a prolonged decline.

There's one ingredient I'd specifically add to this scenario that often gets missed: access to capital. In good times, financing is available and relatively cheap. In bad times, it dries up and gets expensive. We're already seeing articles about investors pulling money from private credit markets. In this scenario, I'd layer on the assumption that refinancing your existing debt is going to be harder and more expensive, and then model what your liquidity looks like if you can't rely on raising new capital to plug gaps.

That's a very different picture to scenario two. And it's the kind of picture you need to see now, not in twelve months.

13 cash-preserving actions to take right now

None of what follows is revolutionary. Most of it you probably already know. But in a crisis, the value isn't in knowing things, it's in actually doing them, quickly and consistently. Think of this as a checklist.

1. Cash in before cash out

The most important mindset shift. Stop managing profit. Start managing cash. Do not release payments until you have physically received cash from your customers - not on the basis of a promise to pay. Get more aggressive about pulling cash in early: early payment discounts, prepayment arrangements, accelerated billing cycles. And update your AR ledger and sales forecast daily, not weekly. Things are changing overnight.

2. Have the uncomfortable conversations

With customers: can key accounts prepay, increase order frequency, or offer better terms in exchange for pricing, priority, or continuity of supply? With suppliers: can you negotiate extended terms, payment deferrals, or revised schedules? Most suppliers would rather keep you as a going-concern customer than push you into default. Also, and this is often overlooked, look at your contracts and take legal advice on material adverse change clauses. They may give you legitimate grounds to renegotiate or exit commitments.

3. Lock down spending and enforce it

Reduce your delegation of authority limits. Bring spending decisions up the chain. Make it harder to spend money without senior sign-off. And be explicit internally: the purchase order process is not optional. No circumvention. No exceptions. The moment people think the rules don't apply to them is the moment you lose control of your cash position.

4. Challenge every payment you're about to make

Ask yourself what's genuinely business-critical in this environment, because the answer might be very different to what it was six months ago. Should you be paying rent on all of your locations right now? Are all of them necessary to operations? I'm not suggesting walking away from obligations. But in a crisis, you need to be intentional and strategic about every pound or dollar going out the door.

5. Attack your fixed cost base

Fixed costs are your enemy. They keep going out regardless of what's coming in. Your goal is to make as much of your fixed cost base variable as quickly as possible. On large property leases: landlords are often more flexible than you'd think, especially if the alternative is vacancy ,we saw this during COVID. On operational sites: go-slow, temporary shutdowns, or mothballing sites that aren't generating revenue. The cost of pausing is lower than the cost of running a site that's earning nothing.

6. Reduce inventories and free up working capital

Inventory sitting in your warehouse is cash that could be in your bank account. In a crisis, cash beats margin. Sell down slow-moving stock, excess raw materials, and finished goods that aren't moving, even at a discount. A discounted sale today beats a write-off later. And pause or significantly reduce raw material purchases, especially if demand is falling. Your MRP reorder parameters were set based on historic demand levels that may no longer apply.

7. Look for the pivot

Crises reshuffle demand. Some businesses that were quick to move during COVID (into online, into adjacent products, into leaner operating formats) preserved revenue streams that would otherwise have dried up completely. Ask yourself: is there a fast, low-cost way to reach customers differently, serve different needs, or operate in a leaner format? You don't need the perfect strategy. You need a fast one.

8. Use every people-cost lever available

People costs are typically the largest cost in any business. First, look at what government support is available - furlough schemes, wage subsidies, employment support. Whatever is on offer, use it immediately. Beyond that: freeze new hires, release subcontractors and temporary workers first, explore rotation models, activate temporary layoff provisions where they exist in contracts, consider unpaid leave for staff willing to take it. These decisions are the hardest because they affect real people's lives. I'm not pretending otherwise. But they need to be on the table.

9. Freeze discretionary and expansionary CapEx

If it's not essential, stop it now. For maintenance CapEx that genuinely has to happen, challenge every item. Can you defer it? Can you accept the risk of failure on a non-critical component and deal with the replacement cost if it happens? The bias here is towards cash preservation, not asset perfection.

10. Move fast on financing

Financing takes time, and the window can close quickly. Draw down on any available revolving credit facilities and uncommitted lines immediately, before conditions change or the facilities are pulled. Review your hedging positions, letters of credit, and guarantees. Understand what it would cost to unwind them and what the risk is if a facility gets pulled. Start the conversation with lenders about interest holidays and deferred amortisation now, not after you've missed a payment. And be very clear about your trade credit insurance position, in a severe downturn, it often gets pulled. Don't rely on it as a safety net.

11. Exhaust every government support mechanism

Beyond employment support: look at VAT deferrals, PAYE deferrals, corporation tax deferrals, wherever your government has made provisions available. Assign someone to own this explicitly. Grants and schemes have windows, caps, and eligibility criteria. They close. Don't assume someone else is handling it.

12. Unlock hidden value in your balance sheet

Look at your balance sheet for unencumbered assets, things that aren't pledged as security. Can you sell them? Can you leverage them to bring new debt into the business? And engage proactively with your financial creditors. Don't wait for them to come to you. Creditors respond much better when you're the one initiating the conversation, making them aware of your situation, and demonstrating that you're working to protect their interests as well as your own.

13. Build visibility

All of the above becomes guesswork without a short-term cash flow forecast. You need to know where you're going to end up - not in six months, but in the next 13 weeks. Even if your first attempt isn't perfect, even if it only looks four or eight weeks out, do it. The 13-week cash flow forecast is what lets you act on information rather than instinct. It's what lets you have a coherent conversation with your lenders. It's what tells you which of the twelve actions above are most urgent for your specific situation.

It's the one thing I keep coming back to, every time, in every crisis I've worked through with businesses.

The honest truth

Nobody knows exactly how the situation in the Middle East is going to develop. But the businesses that will come through it in the best shape are the ones that got visibility early, modelled their scenarios honestly, and started taking action before they were forced to.

I've helped businesses in exactly this kind of situation, some of them in genuinely dire positions, get visibility over their cash position in a matter of weeks and use that visibility to navigate through. If this resonates with where you are right now, I'd want to understand your specific situation before saying anything useful. Let's have a conversation.

You can also get your hands on a free 13-week cashflow forecast workbook, complete with a video user guide and PDF manual, at use13weeks.com/free-training. It's designed to help any business produce their first direct cash flow forecast in a day or two. No strings attached.

Book a call with me by clicking here.