Diagnose a Working Capital Gap
Estimate a near-term cash gap, check receipt timing against fixed obligations, and distinguish a temporary mismatch from a recurring operating deficit.
Leave with a dated cash-gap worksheet, the estimated low point and buffer gap, a receipt-timing scenario to verify, and a named owner for each follow-up task.
Who this is for: Owners and finance operators who see a near-term cash squeeze but need to separate a timing mismatch from a margin, demand, or cost problem.
Start with current evidence.
- 01
Current bank balances and reconciled cash activity by account; separate restricted cash and the minimum operating buffer.
- 02
Open invoices with amount, due date, dispute status, customer confirmation, and expected collection evidence.
- 03
Payroll, rent, taxes, debt service, supplier invoices, committed purchase orders, and other fixed or one-time obligations with dates and owners.
- 04
Recent weekly sales and collections, separated from booked but uncollected revenue and from receipts at risk of delay.
- 05
Recent contribution margin and operating results to test whether the gap is timing-related or reflects a recurring loss.
Move through the work.
Each step names the action and what completion looks like. Record assumptions and unresolved questions as you go.
- 01
Set the window and starting cash
Choose the next 13 weeks or a shorter decision window that covers the expected low point. Reconcile the opening cash figure to bank activity and list restrictions or transfers that make part of the balance unavailable.
COMPLETE WHENThe opening amount is tied to a dated bank reconciliation and restricted cash is shown separately.
- 02
Map expected receipts by evidence
List customer receipts by expected week using invoice due dates, payment history, dispute status, and customer confirmation. Flag the amount of receipts that may arrive after the decision window and count that amount once in the delayed case; do not also subtract it from a receipt total that already excludes it.
COMPLETE WHENEvery material receipt has a source, expected week, confidence note, and follow-up owner, and the delayed case removes each at-risk receipt only once.
- 03
Map fixed obligations and protect the buffer
Schedule payroll, rent, taxes, debt service, supplier invoices, purchase orders, and one-time costs on expected clearing dates. Define a minimum cash buffer and show fixed obligations separately from discretionary or movable spending; record any timing change only after the counterparty agrees.
COMPLETE WHENKnown obligations appear once, the protected cash buffer is explicit, and proposed date changes remain labeled as unconfirmed.
- 04
Find the low point and identify the type of gap
Roll opening cash forward as receipts less payments by week. Compare the low point with the selected buffer, then inspect whether late receipts explain the dip or whether recurring costs exceed normal collected revenue. Period totals can hide an interim weekly trough, so review dates around payroll and large obligations.
COMPLETE WHENThe low week, estimated buffer gap, effect of moving at-risk receipts to evidence-based dates, and timing-versus-structural diagnosis are documented without treating the worksheet as an approval or funding result.
- 05
Test operating responses first
Model collection follow-up, purchase timing, inventory quantities, customer deposits, staffing shifts, and discretionary spend as separate changes. Record who must agree and what customer, supplier, legal, or tax terms need confirmation.
COMPLETE WHENEach proposed response has an owner, a measurable assumption, and a review date.
Hypothetical timing-gap sketch
Illustrative numbers only; this is not a forecast or financial advice.
- Opening available cash
- $18,000
- Week 1 net movement: $12,000 receipts less $14,000 payments
- -$2,000; closing $16,000
- Week 2 net movement: $8,000 receipts less $15,000 payments
- -$7,000; closing $9,000
- Week 3 net movement: $16,000 receipts less $11,000 payments
- +$5,000; closing $14,000
What changes the next move?
- A timing gap is plausible when supported receipts arrive after obligations and normal operating margins remain supportable.
- A recurring deficit or shrinking contribution margin points to a structural operating issue; shifting a due date or adding cash does not correct the underlying economics.
- Aggregate receipts and obligations over a period do not reveal the date-specific weekly trough; use a dated weekly forecast before acting.
- Any financing discussion should use a verified low-point amount, duration, total cost, repayment timing, and downside case, with a qualified human review.
Keep these visible.
- Counting invoices or booked sales as collected cash.
- Double-counting a supplier payment and the purchase order that it settles.
- Treating all bank cash as available while ignoring restricted funds, payroll, tax, or other commitments.
Check, assign, and continue.
Mark items as you verify them. Your selections stay in this tab and are not sent or saved.
Check the current source.
- SBA: Manage your finances ↗
General bookkeeping and cash-flow projection context; it does not validate a business-specific forecast.
- Distilled Funding: AI Cash Flow Stress Test for Local Businesses ↗
Wix retains the canonical article. It explains multi-week disruption modeling; use it alongside a dated weekly forecast. This playbook provides initial cash-gap decision guidance.
- YouTube: Can Your Business Survive One Bad Week? | Cash Flow Stress Test ↗
Published video from the existing YouTube library; use as a short introduction to cash-flow stress testing, then build the dated weekly forecast.
This playbook is general operating guidance. It does not verify records, replace qualified professional advice, determine eligibility, or guarantee a financial outcome. Review current contracts, source records, and applicable requirements with the responsible professional.
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