A restaurant can make a profit every month and still struggle to pay the rent. Sales arrive every day, while rent, wages and VAT leave in a few large payments. A 13-week cash flow forecast shows the tight weeks in advance, while there is still time to act.
Profit and cash run on different clocks
Profit is measured over a month: sales minus the costs that belong to that month. Cash is the balance in the bank on a given day. The two drift apart for ordinary reasons:
- VAT collected over a month or a quarter leaves in one payment.
- Wages and payroll taxes go out on their own dates, often in different weeks.
- Rent leaves on one date, whatever the takings that week.
- Event deposits arrive weeks before the event, and the balance after it.
- Supplier invoices follow their own payment terms.
When three of these land in the same week, a good month can still leave a thin account.
Why 13 weeks, and why weeks
Thirteen weeks is one quarter. That is long enough to catch the next VAT payment and several paydays, and short enough to forecast with some confidence. Plan in weeks: a monthly total hides the one week that hurts.
A worked example: the week of 26 October
Our sample bistro starts its forecast on Monday 12 October with €18,500 in the bank. Its minimum balance, the buffer, is €8,000. Sales run at around €10,000 a week, and after two normal weeks the balance stands at €29,644. Then the week of 26 October arrives.
| Week of 26 October | Amount |
|---|---|
| Opening balance | €29,644 |
| Card & cash sales | +€10,100 |
| Food & drink suppliers | −€3,120 |
| Wages | −€16,500 |
| Rent | −€6,300 |
| VAT payment | −€7,800 |
| Card fees & small purchases | −€450 |
| Closing balance | €5,574 |
| Status (buffer €8,000) | Low |
Sales that week were normal. Wages, rent and VAT simply landed together, and €24,070 more left the account than came in. The following week, payroll taxes of €3,500 and an owner drawing of €2,000 keep the balance down at €7,610, the second Low week. By the week of 9 November it is back to €12,150.
Over the full 13 weeks, €142,980 comes in and €150,060 goes out. The bistro ends the quarter at €11,420, with €5,574 as its lowest point. The December rush, with €14,600 of sales in the week of 21 December, is followed by quiet early January weeks of €8,900 and €7,800. The forecast shows all of this on one screen, in October.
What to do when a week shows Low
A Low week spotted four weeks out is a scheduling job. The same week spotted on the Monday morning is a bad day. Act early:
- Move a non-urgent payment. A stock-up order, a small repair or an owner drawing can often wait a week. In the example, moving the €2,000 drawing from the week of 2 November to the next week lifts that week above the buffer.
- Chase deposits and balances due. Event money already owed should arrive before the tight week.
- Order to par only. Stock on the shelf is cash you cannot spend. Hold bulk buys until the balance recovers.
- Agree a payment date with a supplier in advance. Most suppliers accept a planned later date. Very few enjoy a surprise one.
VAT and payroll tax dates, and the penalties for paying late, differ by country. Check your local rules, and keep payments to the tax office on time. The tax office keeps its own calendar.
Five minutes every Monday
A forecast only helps while it is current. Each Monday:
- Replace last week's forecast with what actually happened, from the bank statement.
- Check the coming weeks for anything new: a large event, a repair, a price rise.
- Add a new week at the end, so the forecast always looks 13 weeks ahead.
Enter each payment in the week it leaves the account, and each receipt in the week it arrives. Rent paid on the 3rd belongs in the week of the 3rd, whatever date the invoice shows.
Forecast it in one sheet
The 13-Week Cash Flow Forecast takes a start date, your opening bank balance and your buffer on one settings tab. The forecast grid has lines for sales, event deposits, other income, suppliers, wages, payroll taxes, rent, utilities, loans, VAT, insurance, card fees and owner drawings. Each week's closing balance is calculated and marked OK, Low or Negative. The summary shows the lowest balance and its week, the weeks below your buffer, total cash in and out, and a chart of the balance against the buffer line. It works in Excel, Google Sheets and LibreOffice.
Related
- Read: Deposits and Balance Terms for Private Events
- Read: Restaurant Break-Even: How Many Covers a Day You Need
- Also useful: Event Booking & Deposit Tracker, see which deposits and balances are due before a tight week
Every template in Restaurant Notes is in the Complete Restaurant Collection: 25 tools in one download.