On my search for missed or forgotten additions of upgrades past, I ran across one little, overlooked, feature that every accountant should know about.  This feature allows you to see into the future and assess your companies cash position with minimal effort.  It allows you to assess your outstanding Accounts Receivables aging, Payables Management aging, chequebook balances and manually enter adjustments that are currently not outstanding transactions but should reflect the cash position.

This tool is called Cash Flow Forecast and it has quickly shown me it’s usefulness and ease of use is too good not to share.

The Basics

After you decide what transactions will affect your cash position, to view your forecast, you simple bring up the Cash Flow Calendar from Financials Inquiry.  Below is an example from my test company that allows me to simply scroll through my months and view what my anticipated cash position will be.

In my scenario, I am deciding to add a new line of fleet trucks, to enhance delivery, before the year end.  The cost of 10 trucks is $500,000 (as seen in the above example on December 20) but I am not sure if we have enough resource to make this purchase and cover all of the known obligations, such as payroll, and year end taxes.

After entering all of my known obligations, and adding the potential purchase, I can view the Cash Flow Calendar and see that my net cash position would support this expansion and leave me with a healthy balance to support further obligations.

How it Works

To get going with this tool, you simply need to setup a forecast profile.  Financials >> Setup >> Cash Flow Forecast.

• Include the GL Account you want to reflect as your opening balance
  • All chequebooks included will also pull into your opening balance so if you have a cash clearing account, this account number can be used or override with $0.00.
• Decide which Chequebook ID’s to include
• Select your options for the Sales module
  • You can choose to display both Open and Work (unposted) AR transactions
  • Choose if you would also like Sales Order Processing documents to be included in your analysis
  • A really nice feature is the ability to use actual document due dates or a customer’s average days to pay
• Select your options for Purchasing
  • Again, you can choose to display both Open and Work AP transactions
  • Choose if you would like Purchase Order Processing documents to be reflected in your analysis
• The last step is to choose additional transactions that you may need to consider
  • Mark the Cash Flow Transactions option and click the blue arrow
  • This will open the Cash Flow Transactions window where you can manually enter items like:
    • Future payroll estimates
    • Future tax obligations
    • Any considerations you think will affect the cash position and would like to analyze.

With those setups complete, you are now ready to view your forecast with the inquiry window.

Looking at my example for December 2017 I can see that on the 1^st of December, my total cash position is set to increase by $118,864.  If I click on the number in blue, it will open the Cash Flow Explorer window where I can view the details of this calculation:

• I can see that I have an estimated $125,000 coming in from licensing fee renewals which was entered as a manual Cash Flow Transaction

• I also have two Purchase Orders that are due for receipt on December 1
• The payment terms of that vendor are Due Upon Receipt, so I would anticipate negative cash flow on that date

In all, I spent less than an hour setting up this example in my test company.  With that time investment, I can now rest easily knowing that the future cash position of my company is available to support my growth initiatives.  With minimal maintenance and a very fast setup, you too can get started using this forecasting tool and because of the flexibility of the setup options, you can setup multiple forecasts to examine:

• Individual or Special projects
• Payroll specific
• Individual chequebook
• Credit line analysis

As always, if you have any questions, please let us know.