Weeks of cash cover is the number of weeks your available cash will meet the payments you are already committed to, counted forward from today one week at a time. You work it out by listing every committed payment by the date it leaves the account, adding them up week by week, and finding the first week in which the running total is larger than the cash you can spend today. Some people call this runway, or talk about burn rate; this page calls it cover. The reading differs from the common shortcut of dividing cash by an average weekly or monthly spend, because payroll, PAYE, VAT and Corporation Tax do not arrive evenly, and the week in which two or three of them coincide is the week the measure exists to find.
What Weeks Of Cash Cover Measures
Cover answers one question: if nothing more came in, how long would the cash you hold today meet what you have already agreed to pay? It is a measurement of where the business stands this morning, not a target and not a statement of how much cash a business should keep. Sizing a reserve is a separate calculation, set out in our guide to how much cash a business should keep in reserve.
Published measures of cover exist, and every one of them divides a balance by an average. The JPMorgan Chase Institute defines cash buffer days as "the number of days of cash outflows a business could pay out of its cash balance were its inflows to stop", calculated as a business's average daily cash balance divided by its average daily cash outflows. In its 2016 report, based on 597,000 US small businesses between February and October 2015, the median business held 27 cash buffer days. In its May 2026 snapshots, based on 2.1 million US small businesses with Chase Business Banking accounts operating in 2025, the typical firm held 17.6 cash buffer days, and the median business in that sample had revenue of $125,200. The two samples were drawn on different rules, so the two medians are not a trend, and a business with a finance team of three is many times the size of the typical firm in either. The figures describe those populations. They are not a benchmark for yours.
The months-of-costs figures that circulate as advice are advice. ICAEW's business advice guidance from October 2022 says that "as a general rule three months of costs available in cash is a good minimum goal". The British Business Bank gives "moving from having one month's available cash, to two or three months'" as an example of improving a business's cash position. SCORE, the US small business mentoring network, reports three to six months of operating expenses as the common recommendation and adds that "using this for every business in every situation is misleading". None of the three shows how its figure was derived. The Charity Commission's reserves guidance for charities, updated in September 2026, frames the question in weeks of income and in the "troughs" in the cash budget, which is the frame this page uses.
What Counts As Available Cash
Start from the reconciled balance of each bank account in your ledger, not from the figure your banking app shows this morning. The ledger balance is the one every payment in your forecast is measured against, and the difference between the two is the reconciliation queue. Then take out any cash you cannot spend.
Both UK and international accounting standards draw that line between cash held and cash available. FRS 102 and IAS 7 require a company to disclose significant cash balances "not available for use", giving legal restrictions and exchange controls as examples. For a business of 11 to 50 people the common cases are a deposit held in a designated account under a lease, money held for a client, and a balance pledged as security. Leave those out of the cover calculation. Many companies of this size prepare accounts under the small-company regime, which does not require a cash flow statement at all, so the available-cash figure usually has to be built from the ledger rather than lifted from the accounts.
Keep an undrawn overdraft or revolving facility out of the cash line. IAS 7 treats undrawn borrowing facilities as a separate disclosure, "indicating any restrictions on the use of these facilities", and CPA Australia's liquidity guidance for smaller businesses describes unused committed facilities as a buffer alongside cash, not as cash. Show the facility on its own line beneath the calculation, with its limit and the conditions in the facility letter, so that anyone reading the number can see what it includes.
VAT collected from customers and PAYE deducted from salaries sit in the same bank account as everything else until they are paid. No rule requires a trading company to hold them apart. This page treats them the way HMRC treats them: as payments with fixed dates, which go in the outgoings line on the day they leave.
What Goes In The Outgoings Line
The outgoings line holds the payments the business is committed to making, each on the date the money leaves the account. No accounting or professional body prescribes what belongs in this line for a trading business, so the convention below is this page's, and it is stated so you can adopt or adjust it. The JPMorgan Chase Institute counts every debit from a business's deposit accounts, including loan repayments, tax payments and owner transfers; that suits a measure built from bank data after the event. A forward reading has to be built from what you know is coming.
Include net payroll, PAYE and National Insurance, pension contributions, VAT, Corporation Tax, rent, loan and lease repayments, supplier payments already approved or due under agreed terms, and subscriptions and Direct Debits that will be collected. Leave out spending you have not committed to. Do not net expected receipts into the base reading. The point of cover is to show how long the business holds without them, and the forecast, which includes them, is the second reading beside it.
The UK dates that do most to make a month uneven are statutory. Each rule below is HMRC's, and the weekend treatment differs by tax, which matters because it can move a payment into a different week.
| Payment | When it leaves | If the date falls on a weekend or bank holiday |
|---|---|---|
| VAT return and payment | Usually one calendar month and seven days after the end of the VAT period | Payment must reach HMRC on or before the deadline, even if it is a weekend or bank holiday |
| VAT by Direct Debit | Collected three working days after the return deadline | The collection date is set by HMRC |
| PAYE and National Insurance | By the 22nd of the following tax month if paid electronically, or the 19th if paid by cheque through the post | HMRC's employer guidance says the payment should reach it by the end of the previous working day; Faster Payments can arrive at a weekend |
| Corporation Tax, profits up to £1.5 million | Nine months and one day after the end of the accounting period | The payment should reach HMRC on the last working day before, unless paid by Faster Payments |
| Employee pension contributions deducted from pay | Must reach the scheme by the 22nd of the month after deduction if paid electronically, or the 19th by cheque | Employer contributions follow the dates in the scheme's payment schedule |
The £1.5 million Corporation Tax threshold is shared between associated companies. HMRC consulted in June 2026 on requiring VAT and PAYE to be paid by Direct Debit, so check these dates against GOV.UK when you build the schedule. In the US, federal employment tax deposits are made monthly or semi-weekly depending on the size of past liabilities, with next-day deposit above $100,000. In Australia, superannuation has been payable within seven business days of payday since 1 July 2026, and quarterly BAS payments fall on 28 October, 28 February, 28 April and 28 July. In New Zealand, employer deductions are paid by the 20th of the following month, or twice monthly for larger employers, and GST is usually due on the 28th. The regulator's own page is the reference in each case.
Why A Weekly Reading And A Monthly Average Disagree
An average spreads the year's payments evenly across its weeks. For a business that pays salaries monthly and its taxes on fixed dates, no week looks like the average. In most months, net pay, PAYE and pension contributions leave in the last ten days, and in a VAT or Corporation Tax month a quarter's or a year's liability lands on top. Dividing cash by average weekly outgoings tells you how long the money would last if every week were the same week. Adding up the committed payments week by week tells you which week it runs short.
CPA Australia's guidance on managing liquidity risk, written for members working in small and medium-sized businesses, makes the same point about forecasting: where there are significant cash milestones to monitor, "consideration should also be given to preparing a cash flow forecast on a weekly basis … as there may be significant peaks and troughs within a month that may need to be addressed and monitored". The same reasoning applies to cover. A monthly figure shows where the month starts and ends. The low point sits inside it.
How To Calculate Weeks Of Cash Cover
Step 1: Fix the date and the balance. Choose the morning you are measuring from, reconcile each bank account in the ledger to that date, and add the reconciled balances of the accounts you can spend from.
Step 2: Take out cash you cannot use. Remove deposits held under a lease, client money, balances pledged as security and anything else restricted. What remains is available cash. Note any undrawn facility on a separate line and leave it out of the total.
Step 3: List every committed payment by the date it leaves. Work through payroll, PAYE and National Insurance, pensions, VAT, Corporation Tax, rent, loan repayments, approved supplier payments and Direct Debits for the weeks ahead. Place each on its payment date, moved for weekends and bank holidays by the rules for that tax.
Step 4: Total the payments by week and keep a running total. Use Monday-to-Sunday weeks. Add each week's committed payments to the running total from the weeks before.
Step 5: Find the first week the running total is larger than available cash. The number of complete weeks before that week is your cover, and the payment that tips it over is the date to look at.
Step 6: Read it beside the forecast. Put the week-by-week forecast balance, with expected receipts on the dates customers usually pay, next to the cover reading. Cover tells you how long you hold without receipts; the forecast tells you where the low point falls with them. Repeat both readings every week on the same day.
A Worked Example: Two Readings Of The Same Six Weeks
The business and every amount below are invented for the example; the statutory dates are real. Hollis & Marr Ltd is a fictional 30-person services company on Xero with a finance team of three. It pays salaries on the last working day of the month and its year end is 31 January, so its Corporation Tax for that year is due on Sunday 1 November 2026. It measures cover on Monday 19 October 2026.
Available cash: the reconciled balances of its current account (£228,000) and reserve account (£36,000) total £264,000. Of that, £14,000 is a rent deposit held in a designated account under its lease, which leaves £250,000 available. It also has an undrawn £50,000 overdraft facility, shown on its own line and left out.
| Week beginning | Committed payments | Week total | Running total | Available cash less running total |
|---|---|---|---|---|
| Mon 19 Oct | PAYE and NIC £41,000 and pensions £9,000 (Thu 22 Oct); supplier run £36,000 (Fri 23 Oct) | £86,000 | £86,000 | £164,000 |
| Mon 26 Oct | Net pay £104,000 (Fri 30 Oct); Corporation Tax £32,000 (Fri 30 Oct, because 1 November is a Sunday); subscriptions £4,000 | £140,000 | £226,000 | £24,000 |
| Mon 2 Nov | Rent £16,000 (Mon 2 Nov); supplier run £37,000 (Fri 6 Nov) | £53,000 | £279,000 | −£29,000 |
| Mon 9 Nov | Loan repayment £6,000 (Mon 9 Nov); VAT for the quarter to 30 September £62,000, collected by Direct Debit on Wed 11 Nov, three working days after the Saturday 7 November deadline | £68,000 | £347,000 | −£97,000 |
| Mon 16 Nov | PAYE and NIC £41,000 and pensions £9,000 (Fri 20 Nov, because 22 November is a Sunday); supplier run £35,000 (Fri 20 Nov) | £85,000 | £432,000 | −£182,000 |
| Mon 23 Nov | Subscriptions £4,000 | £4,000 | £436,000 | −£186,000 |
Cover is two weeks. The running total passes available cash in the week beginning 2 November, on Friday 6 November, when the supplier run leaves. The date to look at is 30 October, when net pay and Corporation Tax leave together and take the balance to £24,000.
The average-based shortcut gives a different answer. Hollis & Marr's outgoings averaged £64,000 a week over the last 13 weeks, and £250,000 divided by £64,000 is 3.9 weeks, which reads as cover until the middle of November. The average is not wrong about the quarter. It is wrong about this fortnight, because PAYE, pensions, net pay and a year's Corporation Tax all fall in the twelve days after the reading.
The second reading adds the receipts the forecast expects, dated on each customer's usual payment pattern rather than on the invoice due date.
| Week beginning | Expected receipts | Committed payments | Closing balance |
|---|---|---|---|
| Mon 19 Oct | £58,000 | £86,000 | £222,000 |
| Mon 26 Oct | £64,000 | £140,000 | £146,000 |
| Mon 2 Nov | £71,000 | £53,000 | £164,000 |
| Mon 9 Nov | £55,000 | £68,000 | £151,000 |
| Mon 16 Nov | £60,000 | £85,000 | £126,000 |
| Mon 23 Nov | £66,000 | £4,000 | £188,000 |
With receipts arriving as expected, the balance never goes below £126,000. The two readings answer different questions. The forecast says the business is fine if customers pay as they usually do. Cover says that if receipts stopped, the cash on hand would last to 6 November, and that the two weeks that matter are the ones beginning 26 October and 16 November. A finance team that reads both each Monday knows which customer payments carry the most weight, and when a slow payer would start to matter.
What The Number Is Not
Cover is not a reserve target. Reading a reserve floor back as weeks of average outflow is how a floor is sized, and that method belongs to our guide to how much cash a business should keep in reserve. Cover measures what you hold against what is due, week by week, from today.
It is also not an argument for or against holding reserves. Whether a business with reserves still needs a forecast is covered in our guide to why you should forecast cash flow if you have reserves. And it is not a forecast template: building the full 13 weeks of receipts and payments is set out in our guide to the 13-week cash flow forecast.
How Float Fits
Float gives you the second reading, and the dated schedule the first reading is built from. It connects to Xero or QuickBooks Online, imports once a day at an hour you set, with a manual sync when you need one, and opens the forecast from the reconciled ledger balance of the bank accounts you have included, not from a bank feed. Float does not connect to your bank. The connection is one-way: nothing Float does writes back to your accounting platform.
Every invoice and bill carries an expected payment date, taken from your accounting platform and falling back to the due date, and you can change it in Float singly or in a batch. Overdue items are assumed to be paid today and flagged in the app, which is the cue to re-date or exclude them. Payroll, rent, loan repayments and tax payments that are not yet bills go in as budgets on the dates they leave. For Xero users, Smart Expected Dates applies each customer's and supplier's average lateness to new invoices and bills, and VAT is forecast automatically; both are available for Xero users only, with support for QuickBooks Online coming soon. The weekly view shows the balance week by week, the List View shows every item day by day over any date range, and a cash threshold line displays the date the balance is due to cross it. Float sends nothing: no alerts, notifications or scheduled reports, and exports are made when you choose to make them. The Monday reading is the finance team's.
Xero and QuickBooks Online are live; Sage Intacct is on the waitlist. See pricing for plans.
Frequently Asked Questions
How do you calculate weeks of cash cover?
Take the reconciled balance of the bank accounts you can spend from and remove any restricted cash. List every committed payment by the date it leaves, total them week by week with a running total, and find the first week in which the running total exceeds your available cash. The number of complete weeks before that week is your cover.
What is the difference between cash cover and runway?
They describe the same idea, how long cash lasts, and the words are used interchangeably. Runway is often given in months, as cash divided by an average monthly burn rate. Weeks of cash cover, as this page uses it, adds up the actual dated payments week by week, which shows the week the money runs short rather than an average duration.
Should VAT and PAYE count as available cash?
The money is in your account, and no rule requires a trading company to hold it apart. Treat VAT and PAYE as payments with fixed dates and put them in the outgoings line on the day they leave. That way the cover reading falls in the week they are paid, which is where the cash leaves.
Does an overdraft count as cash cover?
Keep an undrawn overdraft or facility out of available cash and show it on a separate line. IAS 7 treats undrawn facilities as a separate disclosure with any restrictions on their use, and whether a facility can be drawn depends on its terms and covenants. Reading cover with and without the facility shows how much of the position depends on it.
Why measure cover in weeks rather than months?
Payroll, PAYE, pensions, VAT and Corporation Tax fall on fixed dates, so a business's payments bunch in particular weeks. A monthly figure shows where the month starts and ends; a weekly figure shows the low point inside it. CPA Australia's liquidity guidance recommends a weekly forecast where "there may be significant peaks and troughs within a month".
How many weeks of cash cover should a business have?
No figure applies to every business. ICAEW calls three months of costs in cash "a good minimum goal" and other bodies give one to six months, but none shows how its figure was derived. Cover measures what you have now; the level to hold depends on your own payment dates and risks, which is what sizing a reserve works out.
Should expected receipts be included in the calculation?
Not in the base reading. Cover shows how long the business holds if receipts stopped, so it counts only cash on hand against committed payments. Read it next to a forecast that includes expected receipts on the dates customers usually pay, which shows where the balance's low point falls if they pay as expected.
How often should cash cover be recalculated?
Every week, on the same day, from a freshly reconciled ledger. The reading moves as the calendar moves: the same cash gives a shorter cover in the fortnight before payroll and a quarterly VAT payment, and a longer one the week after they have left.
Float connects to Xero or QuickBooks Online and gives finance teams a rolling 13-week cash forecast built from reconciled accounting data, with expected payment dates on every invoice and bill. Start a free trial or see pricing.
