Guide
Testing a cash flow forecast
Plenty of tools will now generate a cash flow forecast from your accounting data. That's useful, but it isn't the hard part. The hard part is knowing whether a forecast deserves to be believed, especially one someone else built, or one going to a lender or board.
CFO Sentinel does that narrower job. It reviews the forecast you already have and shows which lines rest on the file and which rest on hope. It does not generate a forecast from invented drivers.
A 13-week cash flow layout
The 13-week cash flow forecast is the standard short-term liquidity tool in distress, lender reporting and turnarounds.
Week 1 2 3 ... 13
Opening cash ___
RECEIPTS
Customer collections ___ (basis: aged debtors + history)
Other receipts ___
PAYMENTS
Payroll ___ (cycle dates)
Suppliers ___ (terms + payment run dates)
Rent / leases ___
Tax (VAT/GST, payroll) ___
Debt service ___
Capex ___
Net cash flow ___
Closing cash ___
Facility headroom ___ (limit less drawn)
Minimum liquidity test PASS / FAIL
The review checklist
- Opening cash ties to the bank statement or trial balance on the forecast date.
- Collections follow history. Receipts should come from actual collection patterns by customer, not invoice due dates.
- The lumpy payments are there: quarterly tax, annual insurance, bonuses, rent in advance, and interest dates from the facility agreement.
- Drivers are named. If growth in receipts has no bridge to the pipeline or the order book, that's an assumption and should be labelled as one.
- Headroom is tested against the facility limit and any minimum-liquidity covenant, week by week.
- The trough is visible. Find the lowest closing-cash week and check what it depends on.
Worked review (fictional)
Finding 1 (evidence): opening cash of $2.1m ties to the 30 June bank statement. Finding 2 (inference): receipts in weeks 6–9 assume 45-day collection. The aged debtors in the file show 62 days. If history holds, week 8 closing cash falls below the $1m minimum-liquidity covenant. Finding 3 (gap): no revolver availability certificate is in the file, so headroom can't be confirmed.
How to run it on the desk
Attach the forecast (Excel or CSV) and the supporting schedules to a matter. Ask a bounded question, such as "In which week does this forecast first breach facility headroom, on the file's own figures?" Then run Review to rank the risks. Missing inputs are listed as required data. They aren't filled in. If the file can't support a forecast at all, the record says so.
Questions
Can AI forecast cash flow accurately?
Only as well as its inputs. The more useful work is testing the drivers and naming the assumptions.
What is a 13-week cash flow forecast?
A weekly receipts-and-payments forecast used to manage short-term liquidity. It's common in lender reporting, distress and turnarounds.
Does CFO Sentinel connect to my accounting system?
It works on files you attach to a matter, such as forecasts, trial balances, models and board papers. Excel and CSV files are accepted.