What is a Cash Flow Budget?
A Cash Flow Budget is used to track the forecasted cash inflows and outflows for the agency. By meticulously tracking both incoming and outgoing cash, it provides a clear picture of a company's financial position, enabling informed decision-making. This proactive approach helps agencies anticipate potential cash shortages, plan for necessary investments, manage debt effectively and ultimately maintain stability and growth in their operations.
How to create a Cash Flow Budget in Accountability
From the Accounting menu > click on Budgets > select Cash Flow Budgets. Accountability, by default, creates a Cash Flow Budget across all offices in a monthly view.
Select the following fields to adjust the view of the Cashflow Budget:
| Entity | Select an entity from the dropdown or leave blank to show all entities. The list of Entities are restricted based on the Office Restrictions of the user. |
| Office |
This defaults to the Default Office on the user's Employee record. Select a different office, if needed, or leave blank to select all offices that you have access to. |
| View | Select one of the following options:
|
| Currency | Defaults to the home office currency or the currency of the office selected |
| Start Date | Specify the start date of your cashflow budget |
| End Date | Specify the end date of your cashflow budget or leave blank to have the system default to showing 12 columns (months/weeks/days) in the grid |
How to read a Cashflow Budget from Accountability
The Cashflow Budget represents the total cash balance from a prior period plus all the inflows of the agency minus all the outflows of an agency.
Opening Balance
The Opening Balance line represents the sum of all GL accounts that are labeled as a Cash Account in the Cash Flow Category field.
Pro Tip - Adjustment entries can be made by clicking on the Opening Balance link then enter the details in the Opening Balance Adjustments section.
Inflows: Receivables
The Receivables line represents the sum of all open receivables by due date. If an open invoice was issued in January with a March due date, the total amount of that invoice is represented in the March column.
Pro Tip - Adjustments to the dates can be made by clicking on the Receivables link then clicking on a specific client. Select all or one of the invoices then click on the Adjust button to specify the expected date of payment and a percentage of the amount.
Inflows: Billings
The Billings line represents projected inflows based on future invoices. Billings can be populated via:
- Client Budgets
- Manual Billings line entry
- Import template
Inflows: Other Inflows
The Other Inflows line is a free form entry input to allow agencies to add additional cash inflows not currently represented, eg. a tax refund that the agency is expecting to receive.
Outflows: Payables
Similar to the Receivables line, the Payables line represents the sum of all unpaid invoices by due date.
Pro Tip - Adjustments to the dates can be made by clicking on the Payables line then clicking on a specific supplier. Select all or one of the invoices then click on the Adjust button to specify the expected date of payment and a percentage of the amount.
Outflows: Purchases
The Purchases line represents either a calculation of Billings minus Revenue or a manual Purchase line item entered.
Outflows: Expenses
The Expenses line represents projected outflows based on Expense Budgets created in Accountability or a manual expense line item entered.
Outflows: Other Outflows
Similar to Other Inflows, the Other Outflows line is a free form entry input to allow agencies to add additional cash outflows not currently represented.