What 13-week liquidity planning achieves
13-week liquidity planning is a tool commonly used in restructuring practice. For the next thirteen weeks – roughly one quarter – it compares all expected cash receipts and payments on a weekly basis. This yields the projected balance of cash and cash equivalents, including available credit lines.
Unlike the profit and loss account, liquidity planning does not consider expenses and income, but the actual cash flow. A profitable order can temporarily strain liquidity if materials and wages fall due before payment is received.
Structure and ongoing maintenance
We prepare the plan on the basis of your bank balances, open items, order data, payroll runs and recurring payments. Each week, the planned figures are compared with the actual figures. Deviations are explained and the plan is rolled forward. This creates a rolling management tool whose accuracy increases from week to week.
- Receipts from customer receivables, advance payments and other sources
- Payments for materials, personnel, rent, taxes, levies, interest and repayments
- available credit lines and their utilisation
- plan-versus-actual comparison with explanation of variances
measures to safeguard liquidity
If the plan reveals a gap, countermeasures must be taken promptly. These include rigorous receivables management, agreeing payment terms with suppliers, reducing excessive inventories, deferring non-essential investments and realising assets that are not required for operations.
We clarify financing matters, such as payment deferrals or new credit facilities, in consultation with your bank. We prepare the figures and accompany the discussions, but we do not ourselves broker loans.
An important note
Illiquidity and over-indebtedness are statutory grounds for insolvency to which duties of the management are linked. Whether and when such duties are triggered is a legal question on which we do not give an assessment. If the liquidity plan shows a serious shortfall, you should consult a lawyer without delay.
Frequently asked questions
Why thirteen weeks in particular?
Thirteen weeks correspond roughly to one quarter. The period is short enough for week-by-week planning and long enough to identify bottlenecks in good time. A longer-term monthly plan may be useful as a supplement.
Can I continue the planning myself later on?
Yes. We set up the plan so that, after a familiarisation period, your accounting or controlling department can update it independently.
Does liquidity planning replace a legal assessment of solvency?
No. It provides a business data basis. The legal assessment is the responsibility of a lawyer.
Do you also talk to my bank?
At your request, we accompany discussions with your bank and explain the plan. The financing decision is made by the bank.