The verdict in three sentences
A company can be profitable on paper and die from lack of cash: that is the leading cause of SME failure in West Africa. The key is a 13-week cash-flow forecast that anticipates inflows and outflows, monitors DSO (days sales outstanding) and avoids the bank overdraft billed at 12 to 16%/year. An Excel spreadsheet is enough to start, but a treasury tool at 0 to 19,900 FCFA/month automates reminders and alerts.
Understanding working capital needs
The core problem: you pay your suppliers and salaries before collecting from your customers. That gap is the working capital requirement (WCR). The longer your DSO, the wider the hole.
| Indicator | Definition | Healthy zone 2026 | Warning zone |
|---|---|---|---|
| DSO (customer delay) | Days to get paid | 30 - 45 days | > 75 days |
| DPO (supplier delay) | Days to pay | 30 - 60 days | < 15 days |
| Net cash | Available cash | > 1 month of costs | < 2 weeks |
| Overdraft rate | Cost of short credit | 0% | 12 - 16%/year |
| Receivables | Unpaid invoices | < 20% of revenue | > 40% of revenue |
Cutting DSO from 60 to 40 days on revenue of 50,000,000 FCFA frees up roughly 2,700,000 FCFA of tied-up cash.
The 13-week forecast, week by week
The rolling 13-week forecast (one quarter) is the most useful tool. Each row is a week; you add expected inflows, subtract expected outflows, and get the end-of-week balance.
| Week | Inflows | Outflows | End balance |
|---|---|---|---|
| W1 | 4,500,000 | 3,800,000 | +700,000 |
| W2 | 2,100,000 | 3,200,000 | -400,000 |
| W3 | 5,800,000 | 4,100,000 | +1,300,000 |
| W4 | 3,000,000 | 5,500,000 | -1,200,000 |
| W5 | 6,200,000 | 3,900,000 | +1,100,000 |
Weeks 2 and 4 go negative: you see it 6 weeks ahead, in time to chase a customer, defer a payment or negotiate an advance. That is the whole point of the forecast.
Treasury tool versus Excel
| Criterion | Excel spreadsheet | Treasury tool |
|---|---|---|
| Monthly cost | 0 FCFA | 0 - 19,900 FCFA |
| Auto customer reminders | No | Yes |
| Negative balance alerts | Manual | Automatic |
| Bank connection | Manual entry | Import / sync |
| Formula error risk | High | Low |
| Update time/week | 2 - 4 h | 20 - 40 min |
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Mini case study
Mamadou runs a construction SME in Thies, 60,000,000 FCFA in revenue. His DSO is 80 days: 13,000,000 FCFA sit in unpaid invoices. He sets up a 13-week forecast and systematic reminders at D+30. Within four months, DSO drops to 50 days, freeing roughly 5,000,000 FCFA of cash. He eliminates a 4,000,000 FCFA overdraft billed at 14%/year, saving 560,000 FCFA in interest per year. The tool costs him 19,900 FCFA/month, i.e. 238,800 FCFA/year: the return is immediate.
FAQ
What is the difference between profitability and cash?
Profitability measures accounting profit; cash measures the money actually available. A profitable sale paid at 90 days can bankrupt you before you collect.
How often should I update the forecast?
Every week, ideally on Monday. The rolling 13-week forecast shifts by one week at each update to keep a constant horizon.
How do I concretely reduce my DSO?
Request a 30 to 50% deposit at order, invoice immediately, follow up at D+30 and D+45, and offer mobile money payment to speed up collection.
Is the bank overdraft really that expensive?
At 12-16%/year plus commissions and fees, yes. On an average 5,000,000 FCFA overdraft, that is 600,000 to 800,000 FCFA a year, often more than the cost of a treasury tool.
Let's talk about your project. We build dashboards and invoicing tools that automate your reminders and your forecast. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
