Cash flow planning for SMEs: how to spot shortfalls weeks in advance
Many businesses do not get into trouble because of losses, but because the money is missing at the wrong time. A simple 13-week plan shows shortfalls while there is still time to react.
- Profit and liquidity are two different things. Many SMEs run into trouble even though they are profitable.
- A rolling 13-week plan shows shortfalls early enough to act. It can be kept in a simple spreadsheet.
- Since 2023, ongoing monitoring of solvency has also been a legal duty, for the board of directors of an AG as well as for the managing directors of a GmbH.
Why profit is not enough
The income statement shows whether a business makes money. It does not show when the money comes in. An order invoiced in March and paid in June increases the profit in March, but the cash only reaches the account in June. In between, salaries, materials and rent have to be paid.
Growth is particularly dangerous. More orders mean more upfront costs, more open invoices and more stock. A growing business therefore often needs more liquidity, not less.
How a 13-week plan is structured
Thirteen weeks equal one quarter. That is short enough to plan precisely and long enough to still react to a shortfall. Every week, the week just ended is replaced with the actual figures and a new week is added at the end.
| Line | Content | What to watch |
|---|---|---|
| Opening balance | Balances of all bank accounts | Only available funds, no blocked accounts |
| Receipts | Customer payments, other income | Plan by actual payment behaviour, not by due date |
| Salaries | Net salaries, withholding tax | Record the 13th month's salary and bonuses in the right month |
| Social security | AHV instalments, pension fund, accident and sickness daily allowance insurance | Monthly, quarterly or annually, depending on the contract |
| VAT | Payment of the VAT return | Due 60 days after the end of the reporting period |
| Suppliers and fixed costs | Materials, rent, leasing, insurance | Don't forget annual premiums |
| Taxes and financing | Tax instalments, interest, loan repayments | Provisional tax bills can be planned |
| Closing balance and limit | Opening balance plus receipts minus payments | Compare with the credit limit and a minimum balance |
Will your cash last for the next 13 weeks?
Enter rough averages. The calculator deducts salaries in weeks 4, 8 and 13 and VAT in week 9.
Show values as a table
| Week | Balance |
|---|
A minimum balance as an early warning
Set an amount that should never be undercut, for example one month of salaries and fixed costs. If the plan shows the closing balance dropping below it in one of the coming weeks, that is the moment to act. Not when the account is already empty.
The most effective levers
- Invoice faster: Issue invoices on the day the work is done, not at the end of the month. For larger orders, agree on down payments or partial invoices.
- Follow up consistently: A friendly phone call a few days after the due date often works better than the third written reminder.
- Check payment terms: 30 days for customers and 10 days for suppliers is a bad combination.
- Stock and inventory: Every franc tied up in stock is missing from the bank account.
- Finance investments: Don't pay for long-term purchases out of day-to-day operations; use suitable financing instead.
- Talk to the bank before things get tight: A credit line is easier to get with a plan in hand than in an emergency.
Four mistakes I often see in cash plans
- Revenue instead of receipts: The plan shows what is invoiced, not what actually comes in. If your customers have 30-day terms but pay after 45 days on average, plan with 45 days.
- One-off payments are missing: Insurance premiums, the final statement from the AHV compensation fund, tax instalments or the annual leasing payment only show up when they are due.
- No buffer for the unexpected: A large customer pays a month late and the plan tips over. A minimum balance absorbs exactly that.
- Created once, never updated: A plan that is three months old reassures without informing. Its value comes from the weekly update.
Planning as a duty of the board
Under the revised Swiss company law in force since 2023, the board of directors of an AG must monitor solvency on an ongoing basis. The same applies to the managing directors of a GmbH. An up-to-date cash plan is the simplest proof that this duty is being met. More on this in the article Capital loss and over-indebtedness.
How I put this into practice
For clients I support on an ongoing basis, I build the plan directly on the accounting: open receivables and payables, payroll runs and known due dates flow in automatically. The weekly update then takes just a few minutes. More important than a perfect tool is that someone actually looks at the plan regularly.
This article provides a general overview as of October 2026. It does not replace advice on your specific situation.
Sources: Swiss Code of Obligations, Art. 725 · Value Added Tax Act, Art. 71 and 86
Igor Pavlovic is a fiduciary and auditor in Lucerne, Switzerland. He advises business owners and wealthy private individuals on tax, succession and audit, including cross-border matters.