The 13-Week Cash Flow Forecast Every FedEx Contractor Should Have

On October 5, a Peoria contractor with six trucks opened a new spreadsheet and saw a number he did not like: $28,420. That was his projected cash balance for the week of December 21, in a composite example built from typical operators. His account held $48,000 that morning, and every balance between then and Thanksgiving looked comfortable.

The $28,420 sat below one peak-season week of payroll and fuel, which ran $32,250 for his six trucks. The business itself was healthy. EBITDA annualized from baseline weeks was about $459,320, a 21.0% margin, against $187,200 of yearly truck notes, a DSCR of 2.45x. The calendar was the problem. Winter tires, an insurance installment, a truck note, two owner draws, and the heaviest payroll of the year all landed inside four weeks.

He found it eleven weeks early, which is the whole value of a 13-week cash flow forecast. A profit and loss statement tells you how last month went. A forecast tells you which Monday the account runs thin, while you still have time to move things.

What Contractors Assume About Their Cash

Most contractors judge their cash position by two things: the bank balance and last month's P&L. Both are reasonable. Both look backward. The balance tells you what is in the account today, the P&L tells you what happened, and neither tells you what the account holds in week 11.

The belief holds until a quarter where payments bunch up. A contractor with a 21% EBITDA margin assumes that profit means cash is safe. Profit accrues evenly across the year. Insurance installments, tire purchases, truck notes, and peak-season overtime arrive on specific dates, and cash leaves on those dates.

Contractors skip the weekly view for understandable reasons. The settlement statement is dense, payroll runs on its own cycle, and the books are usually a month behind. Building a forward view means pulling those pieces together, and when the week is full of dispatch problems it is the first task to slide. That choice is common and expensive.

Here is the same quarter checked two ways.

The month-end check passes both times. The weekly view finds four weeks under the floor.

The Financial Analysis: One Quarter, Week by Week

Take an illustrative six-truck operation with $2,184,000 of annual settled revenue, which is $42,000 a week at baseline. Baseline payroll is $17,220 a week (41% of settled revenue), fuel is $8,820 (21%), and other operating costs run $4,200. Truck notes total $15,600 a month, an assumed $2,600 per truck. Monthly insurance is $9,600, plus one $22,400 installment in the week of December 7. Owner draws are $6,000 every other week. Opening cash is $48,000. FedEx pays settlements weekly in arrears, so every row below tracks the week the money lands.

Settlements are not flat. The one landing in Thanksgiving week is lighter at $37,800. The four peak weeks in December bring $45,600 of settlement but $22,800 of weekly payroll, because of extra drivers and overtime. Winter tires for the fleet cost $14,600 the week of November 30. Each of these goes on the date the cash actually moves.

Read the table by week, not by total. Weeks 3, 7, and 11 each carry a $15,600 truck note, so cash dips before settlements rebuild it. Week 8 is a quiet week for revenue. Then weeks 9 through 12 stack winter tires, a $22,400 insurance installment, a truck note, and $22,800 a week of payroll on top of owner draws. Net cash flow is negative in every one of those four weeks, and the cushion built in the first six weeks drains away.

Cash ends the quarter at $38,020, a net drain of $9,980 from the $48,000 opening balance. The path matters more than the total. Cash climbs to $75,360 in week 6, then falls $46,940 by week 12. The line that matters is the cash floor. We set it at two normal weeks of payroll and fuel, $52,080 here. Ending cash sits under that floor from the week of December 7 through the end of the quarter, and bottoms at $28,420. That is $23,660 below the floor, and one breakdown away from an empty account.

Seeing it on October 5 gave him time to act. He asked about splitting the $22,400 installment into two payments of $11,200, one in week 10 and one in week 14. A premium finance arrangement can add a down payment and fees, so he priced it before agreeing. He held his owner draws in weeks 10 and 12, and he split the tire order into two lots of $7,300, one in week 9 and one in week 13. None of those calls cost money.

Case Study: The Des Moines Engine Replacement

A Des Moines contractor, another composite, ran four trucks and $1,456,000 of annual settled revenue, $28,000 a week. His floor was $34,720, two weeks of payroll and fuel at 62% of settled revenue.

His first 13-week forecast showed $9,150 at the end of week 7. Two payments had landed in the same stretch: a $26,500 engine replacement on one truck and a $20,000 down payment on a replacement for another. Each decision made sense alone. Together they put the account $25,570 under the floor.

The dealer's delivery date had slack, so he moved the down payment from week 7 to week 12. The shop agreed to split the engine invoice into two payments of $13,250, one in week 6 and one in week 10. The re-run showed $42,400 at the end of week 7, $7,680 above the floor.

He borrowed nothing and skipped no draw. The replacement truck arrived five weeks later than first planned. Finding the same problem in week 7 would have meant a credit line draw or a late payment to the shop, taken at the moment he had the least room to negotiate.

He also learned something about the shop. The owner had never been asked to split an invoice, and agreed in one call. Vendors tend to work with a date they hear about early, and tend to be less flexible when the request arrives with the check already late.

The lesson is lead time. A shortfall seen in week 1 is a scheduling problem. The same shortfall seen in week 7 is a financing problem.

What Changes Month to Month

A forecast is a weekly habit, not a one-time report. Five practices keep it useful.

The routine takes about 30 minutes on a Monday once the settlement has posted. One person owns it, whether that is you, your bookkeeper, or your CFO, and the same file is used every week so the history builds on itself.

Roll it forward every week. Drop the week that just closed, replace the forecast with actuals, and add week 14. A forecast that is never updated turns into a 13-week guess.

Track the variance. Compare forecast settlements and payments with actuals each week. Two straight misses of $3,000 or more on settlements means an input is wrong, and the cause is usually a route, a rate, or a timing assumption.

Put every lumpy payment on a date. Insurance installments, tires, registrations, quarterly tax payments, and truck notes each get a specific week. An item with no date is the one that surprises you.

Review it against the calendar of decisions you have coming. A truck purchase, a new route, a bonus, or a tax payment should each be tested in the forecast before the commitment is made, not after.

Ask for terms early. Installment plans and delivery dates tend to move when you ask eight weeks ahead and rarely when you ask two days ahead.

The CFO View: Cash Position, Decisions, and Growth

A CFO manages the gap between when money arrives and when it leaves. A P&L cannot show that gap, and neither can the annual coverage ratio a lender tests.

The Peoria operation clears that test easily. EBITDA of $459,320 over $187,200 of debt service is 2.45x, annualized from baseline weeks, before peak-season payroll and before any fleet reserve. After $156,000 of owner draws, coverage is 1.62x, still above the 1.35x we underwrite to. A lender looking at the annual numbers sees a healthy business. The weekly forecast shows the same business short on cash for four weeks. Both statements are true.

The forecast also turns decisions into tests. Can I buy the truck in January? Put the down payment in the week it would land and see whether the balance holds above the floor. Can I add a route? Payroll and fuel for the new work start before its first settlement arrives, and the forecast sizes how much cash that gap needs.

It also changes when you borrow. A credit line arranged while the forecast shows $65,000 is a routine request. The same request made at $28,000 is a request from someone who is already short. If you need financing, ask for it while the forecast still holds above the floor.

One caution on the fixes in the Peoria example. Splitting the insurance installment, holding two draws, and splitting the tire order moved $30,500 out of weeks 9 through 12. Of that, $7,300 lands in week 13 and $23,200 lands after the window. The money still has to be paid, and the January forecast has to carry it.

Contractor Questions About the 13-Week Forecast

Q: What is a 13-week cash flow forecast?

A week-by-week projection of cash received and cash paid out for the next 13 weeks. It rolls forward each week, so you always see a full quarter ahead.

Q: Why 13 weeks instead of a 12-month budget?

A quarter is far enough to catch insurance installments, tire purchases, and peak season, and near enough that the estimates stay accurate. A budget shows profit by month. This shows cash by week.

Q: How much cash should I keep as a floor?

Small-business guidance often cites two months of operating expenses as a full reserve. Two weeks of normal payroll and fuel is the minimum we watch every week, and the reserve you build toward is larger. Your own floor depends on how volatile your settlements are and how quickly you can borrow.

Q: Where does the data come from?

Settlement statements, the payroll register, fuel card statements, loan and lease schedules, insurance invoices, and the bank account. Most of it is already in your books.

Q: How often should I update it?

Weekly, after the settlement posts. Replace the forecast week with actuals, add a new week 13, and note any variance over $3,000.

Q: What should I do if the forecast shows a shortfall?

Work in this order: move payment dates, split large invoices, hold discretionary draws, then arrange credit before you need it. Each step gets harder as the date gets closer.

Conclusion

Profit tells you the business works. A 13-week forecast tells you whether the account will survive the calendar. Build it from your settlements, payroll, and fixed payments, set a floor, and update it every week. The contractors who do this find their problems in October and fix them with a phone call.

Related reading: Why Cash Flow Fails Before Profit on a FedEx Route, DSCR: The Metric That Kills FedEx Deals Before They Ever Close, and Route Profitability Playbook: How to Analyze Each FedEx Route Like a CFO.