13 Week Cash Flow Forecast for NetSuite Users

When you’re about to set up a new NetSuite cash flow forecast, the time horizon you select matters. You will choose either a short (1-3 months), medium (3 months - 1 year) or long-range (several years) forecast model based on what kind of information you need to gather. Do you want to see daily cash inflow (short)? Or you might be more interested in weekly payments (medium) or quarterly sales trends (long).

The most popular and useful time period for cash planning and decision making falls into the medium-term category and is 13 weeks. This span of time gives you a balance between range and accuracy. It provides you with a perspective that extends far enough into the future to guide your planning while at the same time allowing you to forecast with a level of accuracy that bolsters your confidence in your financial decisions.

In this blog, we’ll cover the uses of a 13 week cash flow forecast and why this report is so important. But we’ll also take it a step further to show how using a particular NetSuite 13 weeks cash forecasting tool can improve your cash forecasting. This third-party integration uses artificial intelligence (AI) for improved accuracy and includes features that allow you to perform variance analysis and scenario comparison.

How to Use a 13 Week Cash Flow Forecasting Model

Different sets of stakeholders find 13 week forecasts valuable for getting a read on a business’s overall financial health and future cash flow. The CFO and other corporate senior management will use the 13 week forecast in their quarterly sessions for planning and strategy. In addition, they use these forecasts to keep an eye on any potential problems with cash flow down the road.

Likewise, investors want to see a 13 week model for evaluating the overall financial health of a company. And oftentimes, banks and lenders will require this report before they make any funding decisions. 

So specifically, how can the 13 week cash forecast model be used?

Gain Valuable Insights

Because the NetSuite 13 week cash flow forecasting model is relatively short, it provides insights that are more reliable–and therefore more useful. Forecasts that are longer than 13 weeks will be less accurate because of the unpredictability of changing business environments. The further into the future a forecast extends, the less reliable it will be. 

The 13 week time horizon is long enough to incorporate historical data that can give you an idea of what your cash flow will be in the near-term. On the other hand, shorter time periods–weekly, for example– won’t provide enough history to make truly useful estimates.

Make Medium-Term Plans

The beauty of the 13 week forecast is that it helps you with medium-term planning, but at the same time, it doesn’t impact your long-term planning. With visibility of 13 weeks, you can make plans for managing cash such as repaying loans, investing and drawing down debt without those moves affecting any long-term plans for capital expenditure.

Get the Details

Each of the 13 weeks in the forecast is shown in detail in the forecast–it’s not merely a composite multi-week perspective. This level of granular detail in a comprehensive report gives both internal and external teams the opportunity to analyze medium-term planning efficiently.

Look for Liquidity Risks

Because of the weekly liquidity visibility this forecast time period gives you, you can rely on its accuracy when it comes to identifying medium-term risks relative to liquidity. Furthermore, if risks have been identified, the 13 weeks provides enough time for you to determine a strategy and act on it. For example, if you were to predict a potential shortfall 10 weeks out, you and your team could use the next three weeks to explore bank funding or other lending options.

Use in Quarterly Planning

Typically, senior leadership will want to see cash position reports on the regular reporting dates

of monthly, quarterly and yearly. With a weekly rolling 13 week forecast, they get the best of both worlds–a report that covers a full quarter and also gives visibility into cash on the next key date or by the end of the quarter.

Proof for Banks and Investors

Lenders and investors need to see creditworthiness and evidence of positive control of overall finances. The 13 week cash flow forecast clearly shows a business’s working capital. By using this report, banks and potential investors can easily determine how solid a business is before deciding on whether to risk funding it or not.

Why is the 13 Week Cash Flow Forecast Valuable?

It’s the balance between range and accuracy that makes this time period so popular. No other time frame provides both without compromising the other. Additionally, it’s important for these reasons:

• This time frame is strategic because the next quarter-end is always included.
  
  
• It’s quite common for banks to ask specifically for a 13 week cash flow forecast so they can gauge covenant risk levels or a business’s general ability to service its debts.
  
  
• Investors and/or owners like to see the 13 week forecast as a snapshot of a company’s overall financial health.

The Key to Improving Your 13 Week Cash Flow Forecast

NetSuite users can get even more usefulness from their forecast by integrating this NetSuite 13 week cash forecasting tool. Payference is an AI-driven all-in-one cash management platform that seamlessly integrates with NetSuite. It streamlines your AR processes, decreases DSO and makes billing, collections and payment acceptance easier. It also includes features that enhance NetSuite’s automation functions–a Pay Button, ability to send multiple invoices at once, an easy-to-use customer interface, and more. 

And because it is powered by AI and machine learning, it improves the accuracy of your 13 week forecast and:

• Allows you to view all cash positions in real-time from one source
  
  
• Reduces the errors from human inputting
  
  
• Enables you to efficiently manage your forecasts
  
  
• Provides the flexibility to override and adjust items in cash forecasts
  
  
• Enables you to perform variance analysis and scenario comparison

If your interest has been piqued, why not see for yourself how the Payference NetSuite 13 week cash forecast tool works with a short demo? Scheduling one is easy. Just click to set one up at your convenience.