Weekly Cash Flow Checks: Stay Ahead of Surprises

Cash flow is the lifeblood of any business. Without it, even profitable businesses can run into trouble. Yet many business owners, and even some finance teams, treat cash flow as a monthly or quarterly review item. That’s a mistake.

A weekly cash flow check is a simple, powerful habit that keeps you informed, proactive and in control. It’s a simple routine that will help you to keep your business financially healthy, spot opportunities early, and gain confidence in every decision.

What can weekly checks do for you?

Weekly cash flow checks can help you to:

• Avoid surprises. When you review your cash inflows and outflows weekly, you’ll spot timing gaps, slow-paying clients, or unexpected expenses before they become urgent.
• Plan smarter. Being able to see what’s happening to cash will help you make better decisions and avoid problems. For instance, should you delay a payment, push harder on collections, or hold back on spending?
• Spot opportunities early: Regularly reviewing cash flow can reveal trends and openings you might otherwise miss, such as funds that are available to grow the business or potential savings on expenses.

What are the core steps for a weekly check on cash flow?

Hopefully, you’re convinced of the benefits, but how do you do it? Here are five steps to a weekly check on cash flow.

STEP 1: Update Cash Position

Start by reviewing your bank balances and reconciling them with any outstanding invoices and bills.

You’ll need to make sure your accounting data is accurate and up-to-date, but this should help you know exactly how much cash is available.

STEP 2: Project the Next 2-4 Weeks

List out everything you expect to receive and everything you expect to pay out over the next 2-4 weeks.

This will help you to see where potential shortfalls could come, or where you might have an opportunity.

STEP 3: Compare Forecast to Reality

Look back at last week’s projections and notice how they differed from what happened in reality. Make sure you know the reason “why” behind differences. Was it a late payment? Were there unexpected expenses? Or did a sale you were expecting not come off?

As you do this, you’ll get better at estimating what’s likely to happen in future. For instance, you might tend to be too optimistic about when customers will pay you.

STEP 4: Identify Action Items

Based on what you’ve learned, you should be able to list out some actions that can be taken over the coming week.

Don’t necessarily try and list everything possible. You only have a week before the next review. Make sure that you flag the most critical issues so that you can make a meaningful adjustment.

You might decide to set a program of calls to customers to chase collections, defer non-critical expenses, or adjust staffing plans.

STEP 5: Document and Track Trends

Keep a simple log of your weekly checks. Over time, patterns can emerge that will help you in your budgeting, forecasting and decision making.

Tips

• A simple spreadsheet with columns for inflows, outflows, net cash and comments can be a good start and make it easier to collect and record the information you need.
• Many banking apps can be set to automatically notify you if balances drop below a preset threshold.
• Consistency is key, so you’ll want to schedule a fixed day each week for this review. Mark it in your calendar and make it non-negotiable.

Bottom line

Weekly cash flow checks can transform your financial management from reactive to proactive. It can mean peace of mind and smarter decisions, and give you an insight into your business that goes way beyond what day-to-day bookkeeping allows.