Lately, I have noticed a number of advertisements on how AI can help make the 13 week cash flow forecast easier to complete. I’ll take that at face value but the bigger question is why are you doing this at all? I’m probably a contrarian on this point but in most circumstances, I think forecasting weekly cash flow is a waste of time. What are those circumstances? Any profitable and property capitalized company.
I’ve only done weekly cash flow forecasts a handful of times. Here’s the list.
- Twice managing Chapter 11 cases. The first was an industry phenomenon while the second was a management issue. The first was over 20 years ago and still operates to this day. In the second case, I told investors who had just injected $2M that if they did not replace the CEO, the company would be in bankruptcy by year end. They didn’t; and it was.
- When a client was placed in the “special assets” category by their bank (who had insisted that they hire a CFO). For those of you who are not familiar with the term, “special assets” is not a good thing in the banking world.
- Another was an extended industry downturn after I was brought in for a turnaround. The turnaround was successful. Although it was helped by an industry wide tail wind, we simply didn’t have enough time to accumulate adequate capital for the inevitable downcycle.
- I’m in the process of reviewing one now. We are considering buying the company out of receivership. What’s that tell you?
While there may be one or two more I can’t recall at the moment, weekly cash flow forecasting is not part of my regular cycle nor should it be part of yours. What long term economic value is there in trying to guess or worry about whether customers are going to pay you early in the week so you can make payroll or later in the week? How does juggling payables to ensure checks don’t bounce enhance enterprise value?
That said, you should absolutely stay on top of accounts receivable. AR management is critical and is a day-to-day function that is necessary to ensuring strong cash flow. It’s easy for net 30 to become 60, 90 or longer if you’re not paying attention.
Instead, you should be driving profitability at or above industry benchmarks. And as part of your annual budgeting cycle and longer term (3-5 year) planning process you should be forecasting your balance sheet and cash needs. The results of that should be used to build your capitalization plan which ensures that weekly cash flow forecasting is unnecessary.
So, if you or someone on your team is forecasting weekly cash flow, you should take a step back and understand the underlying reasons. Why use AI to perform a task you shouldn’t be doing in the first place. Fix the underlying issues and the cash flow stress will be a thing of the past.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to [email protected]
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your cash is flowing. know where.®
Ken Homza
Copyright @ 2026 Kenneth M. Homza