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Weekly Cash Forecast Introduction

A walkthrough the weekly cash forecast we create for Law Firms.
 Weekly Cash Forecast Introduction
Weekly Cash Forecasts
Written by
Paul W Carlson, CPA
Published on
Jul 5, 2018

This video covers the basic outline of the report includes and why each financial point is essential to the success of your law firm.

This video covers the basic outline of the report includes and why each financial point is important to the success of your law firm.


Hi, I'm Paul Carlson, CPA.

We're going to walk through the weekly cash forecast that we create for law firms. To provide an introduction, let's quickly walk through the basic structure of the forecast.

So for each week, we start with beginning cash. We add in deposits. We subtract out payments. And we get the ending cash balance.

The yellow columns are actuals. So these are for weeks that are actually completed. And the white columns are for future periods. So we can see that this is a firm that has an S corp, that has a distribution at the end of the quarter. And right now, they will not have enough cash to make that distribution.

In looking at the forecast, the goal is to forecast ending cash in the operating account at the end of each week. With that purpose, the forecast departs from financial reporting in several ways. The strongest example is credit cards, that individual credit card charges made this week are ignored, that we are only going to model actual payments from the operating account to the credit card companies.

Which is why in the credit card columns, we only see monthly payments to the credit card. We don't see charges every week.

We will also try to focus on keeping it simple. And we will put roughly 20% of the bills into the other bills recurring line that we find that if we can model the significant bills, that the little 200, $300 charges that go through the account each week don't really matter much, and we can just kind of run them in this other line.

In the forecast, we like to include six weeks of historical information and then 6 to 8 weeks of forecasted values.

We use the historical information as base rates for forecasting of future periods.

Our typical process is we come in each week, each Monday, and we update a column for the week that has just closed. And we see this process as a collaborative process between our accounting firm and the law firm's managing partner.

Each week we will come in and update the prior week's closed items.

And then we will send a note off to the managing partner saying cash is updated. Managing partner will come in and review items, and they will often change revenue line. They will change revenue detail, because they have a little more information within the firm on what their expected collections are going to be.

And they will sometimes add significant charges that we don't know about, and either type it into the spreadsheet or send us an email, and we will go ahead and add that in. I think that's it for a quick overview. If you have any questions, please let us know.