A forecast shows when cash runs short and by how much, which is what a funding request has to explain. The table below is invented, computed line by line, and shows a low week caused by a parts order landing just before payroll.
How to prepare a cash flow forecast when a Springfield, TN plumbing contractor buys materials before the job pays
A plumbing contractor that buys pipe, fixtures and water heaters for a job weeks before the customer pays has a forecast problem more than a sales problem. Six steps build the forecast:
- Start from the bank balance today, not from last month’s profit.
- List each open job with its materials cost, the week the materials are bought and the week payment is due.
- Add payroll on its real pay dates, plus rent, insurance and any loan payments.
- Total each week: starting balance, plus deposits, minus payments, gives the closing balance.
- Mark the smallest closing balance and the week it falls in.
- Decide what cushion the business wants to keep, and size any draw or loan to that gap, not to the whole quarter.
A spreadsheet is enough. The forecast is only as good as the payment dates, so update it when a customer pays late.
13-week cash flow forecast: an invented quarter at a Robertson County, TN auto repair shop
Illustration only, invented figures: a Robertson County, TN auto repair shop starts this quarter holding $8,400. Payroll of $9,800 falls every other week, shop rent of $3,150 lands in weeks 1, 5 and 10, and a $9,300 parts and tire order in week 6 sits just before the week-7 payroll.
| Week | Customer receipts | Parts and tires | Payroll | Rent | Closing balance |
|---|---|---|---|---|---|
| Week 1 | $10,200 | $4,100 | $9,800 | $3,150 | $1,550 |
| Week 2 | $10,900 | $3,800 | – | – | $8,650 |
| Week 3 | $9,800 | $4,600 | $9,800 | – | $4,050 |
| Week 4 | $10,600 | $3,900 | – | – | $10,750 |
| Week 5 | $11,300 | $4,200 | $9,800 | $3,150 | $4,900 |
| Week 6 | $9,100 | $9,300 | – | – | $4,700 |
| Week 7 | $10,100 | $4,400 | $9,800 | – | $600 |
| Week 8 | $11,400 | $3,900 | – | – | $8,100 |
| Week 9 | $9,900 | $4,800 | $9,800 | – | $3,400 |
| Week 10 | $10,700 | $4,000 | – | $3,150 | $6,950 |
| Week 11 | $11,000 | $4,100 | $9,800 | – | $4,050 |
| Week 12 | $9,600 | $3,600 | – | – | $10,050 |
| Week 13 | $11,800 | $4,300 | $9,800 | – | $7,750 |
Week 7 is the pinch in this invented forecast: the shop closes it with $600. Against a $5,000 cushion, the shop is $4,400 short that week. A $4,500 draw on a credit line in week 7, cleared from week 8 receipts 7 days later, costs $10.74 in interest at a 12.45% annual rate. With the draw, week 7 closes at $5,100, and week 8 closes at $8,089.26 after the paydown and interest, $10.74 under the table’s $8,100.
Planning for payroll weeks at a Springfield, TN retail store? How can a business improve cash flow
- Set reorder points from sales history so stock is bought when it is needed, not all at once.
- Ask suppliers whether statement dates can move to the week after payroll.
- Mark down stock that has sat for months and turn it back into cash.
- Check how long card deposits take to reach the account and plan payroll around that timing.
- Keep a credit line for the gaps that remain, and pay it down as stock sells.
Each change shrinks the gap a loan would have to cover. What is left after them is the amount worth asking about on the line of credit page or the working capital page.
What the Springfield, TN posts here work through: credit lines, vans and drain machines, clinic equipment and repair shops
Posts on this blog follow the trades this site writes about, each one worked through in invented numbers:
- A flooring and tile contractor carrying three builder jobs on one commercial line of credit
- A plumbing and HVAC contractor pricing a used van, drain machines and duct testing gear
- Home builders choosing new or used and the loan term for a telehandler and a tracked dumper
- A physician office adding infusion stations and a bone density scanner
- A repair shop buying fluid exchange machines, test gear and battery and brake stock
- A coffee bar weighing a card-sales advance against fixed payments
Each article points back to the matching funding page; the business loans page compares all six side by side.
By Swiftpine Loans · Updated