Building the 13-Week Cash Forecast for a Therapy Group: The Receivables Engine by Payer, the Scheduled-Sessions Layer, the Payroll and Premium Calendar, the Cash Floor, the Monday Refresh, and the Thirteen Weeks Laid Out

The 13-week cash forecast is the instrument that turns a therapy group's structural cash gap — sessions delivered now, cash collected weeks later, payroll every other Friday regardless — from a recurring surprise into a managed schedule. It is built from data the group already has, refreshed every Monday, and read for one line: the ending balance each week against a floor. How to build it.

How is the 13-week forecast grid laid out?

Thirteen columns, one per week, starting with the current week; rows grouped into opening cash, collections by source, disbursements by date, net cash, ending cash, and the floor; a fourteenth column is added every Monday and the oldest dropped, so the horizon rolls.

The collections engine, layer one: how is the aging by payer projected?

The open receivables aging — current, 31 to 60, 61 to 90, over 90 — by payer group as of the forecast date; each payer group's historical collection timing from the remittance history: the share of a week's claims that pays in week two, week three, week four, and so on through week twelve, with a residual that is never collected; the timing curve applied to each aging bucket to project the week in which each dollar of open receivables lands — commercial payer A with a median 24 days to cash puts most of its current bucket in weeks three and four; managed Medicaid at 55 days puts its current bucket in weeks seven through nine; claims already over 90 days are projected at the residual collection rate, which is often 30 percent or less; this layer is the most accurate part of the forecast because the claims exist and the payers' behavior is known.

Layer two: sessions scheduled but not yet billed. The next two to three weeks of scheduled sessions from the practice management system, by payer group, reduced by the group's no-show and late-cancellation rate, multiplied by net revenue per session for that payer, then lagged by the payer's timing curve from the week of service — so a session scheduled in week two with commercial payer A is projected to collect in weeks five and six; beyond three weeks, scheduled sessions are replaced by the group's weekly session run-rate by payer, because the schedule is not yet full.

Layer three: self-pay and time-of-service collections. Self-pay sessions and patient-responsibility amounts collected at the visit — copays, coinsurance, deductibles — projected from scheduled sessions and the group's time-of-service collection rate, landing in the week of service with no lag; this layer is why time-of-service collection discipline is a cash-forecast variable, not just a billing one.

Layer four: other inflows. Patient-balance statements and payment plans at their historical recovery rate; contract payments from school districts, employers, or regional centers on their invoicing and payment cycles — often 60 to 120 days — placed in the week they historically arrive; grant draws; and any line-of-credit draw already planned, shown separately so operating collections are not confused with borrowing.

Why should disbursements be forecast by date, not by average?

Payroll on its exact pay dates with the gross-to-net and employer-tax amounts — including the quarters where employer tax resets or a bonus payment lands; rent on the first; malpractice, general liability, and health insurance premiums on their actual due dates, annual or semi-annual as they fall; estimated tax payments on their quarterly dates; software, licensing, and subscription renewals on their anniversaries; loan principal and interest; contractor and vendor payments on the cycle they are actually paid; credentialing and licensing fees; owner distributions only when the policy permits them; and a line for the unexpected at a modest weekly amount, because something always arrives — the forecast fails when any of these is smoothed into a monthly average, because the crunch lives in the week when payroll, rent, and a premium coincide.

How are net cash and the ending balance calculated?

Opening cash plus total collections less total disbursements gives net cash for the week and the ending balance that becomes next week's opening; the ending balance line is the forecast — everything else exists to produce it.

How should a therapy group set its cash floor?

One full payroll cycle plus one month's rent is the minimum for most groups; add the next quarter's known lumpy items and any working-capital need from planned hires during their credentialing gap; the floor is drawn as a line across the thirteen weeks, and every week whose ending balance falls below it is flagged in the report — not as an alarm, but as a decision with a date.

The decisions a flagged week enables. Seen five weeks out: draw on the line of credit for the three weeks needed and repay from the recovery; move a discretionary purchase or a hire's start date; accelerate patient-balance collection on the aged self-pay receivables; delay an owner distribution; or, if the dips recur, size a facility against the receivables cycle rather than against a round number — seen the week of, the same dip is a missed vendor payment and a conversation with the bank the group did not want to have.

What happens in the Monday refresh?

Replace last week's forecast column with actuals; compute the variance by line — collections by payer, time-of-service, disbursements; roll the horizon one week; update the aging and the schedule; re-run the timing curves; and read the variance, because it is diagnostic: a persistent shortfall from one payer means slower payment or rising denials and belongs in the payer file; a shortfall against scheduled sessions means the no-show assumption is wrong; a shortfall in time-of-service collection means the front desk is not collecting; disbursements over forecast mean something was missed on the calendar; the refresh takes forty-five minutes once the engine is built and is owned by one person.

Which cash scenarios are worth running?

The largest payer slowing by two weeks; a clinician's departure removing their sessions for twenty-four weeks; a new hire's credentialing gap; a denial wave on a managed-Medicaid plan; a school contract paying 45 days late — each run as a toggle on the base case so the group knows its exposure before it happens.

What the forecast is not. Not the budget — the budget is a twelve-month plan built from capacity, and the forecast is a thirteen-week reality built from claims and the calendar; not the income statement — accrual revenue recognized by date of service will differ from collections every single week, and the forecast is only ever about cash; not a monthly exercise — a 13-week forecast refreshed monthly is a 9-week forecast with a stale first month.

What does building the forecast the first time involve?

Two weeks: pull twelve months of remittance data and compute the timing curves and residuals by payer group; pull the current aging by payer; pull the next three weeks of scheduled sessions by payer and the no-show rate; measure the time-of-service collection rate; list every dated outflow for thirteen weeks from the payroll calendar, lease, insurance schedules, tax calendar, loan documents, and vendor terms; agree the floor with the owners; build the grid; run it; and reconcile the first two Mondays against actuals before anyone relies on it.

Why is the 13-week cash forecast CFO work?

The timing curves require joining remittance and practice-management data; the disbursement calendar requires knowing every contract and due date in the business; the floor is a policy decision made with the owners; the variance read requires understanding what each line means; and the flagged week is a decision the CFO brings to the owners with options — none of which happens from a bank balance.

Worked example

A 15-clinician outpatient group, US$3.2 million net revenue, payroll every other Friday (US$84,000 gross-to-net plus employer taxes), rent US$14,500 on the first, opening cash US$196,000, floor US$112,000 (one payroll plus rent plus a US$14,000 buffer). Weekly session run-rate 540, no-show 12 percent, mix: commercial A 36 percent (24 days), commercial B 20 percent (41 days), managed Medicaid 19 percent (55 days), self-pay 25 percent (0 days). The thirteen weeks:

Illustrative figures for a hypothetical organization; not a client's data.

Read: the group never runs out of cash, but week 12 breaches the floor by about US$7,400 because three things coincide — payroll, the health-premium true-up, and the tail end of the aging having mostly collected while the run-rate collections are still ramping. Seen on the first Monday, twelve weeks out, the options were ordinary: schedule a US$25,000 line draw in week 11 with repayment in week 13, move the software renewal in week 9 to a monthly plan, or push US$9,000 of aged self-pay balances with a two-week statement campaign in weeks 7 and 8. The group did the third and the first; week 12 closed at US$131,000. Without the forecast, the same week would have arrived as a payroll-Friday call to the bank.