Introduction to Cash flow CaFE

Nori -

CaFE is named after "Cash Flow Engine". In CaFE, you can create, update and monitor your cash flow in your business. And hidden risk of cash shortfall is automatically recognised and practical countermeasures are promptly proposed.
Your future cash flow is created by the combination of our “Budget” and latest actual transactions, which are set in your accounting system.
In this document, the main concepts of the CaFE are introduced with practical manner.

(watch an introduction video here)

Table of Contents

 

Cash Flow in CaFE

CaFE composes your daily cash flow forecast with transaction (or transaction group) base, which following 3 basic properties: who, when, and how much.

You can see the daily cash flow forecast by clicking “Forecast” in the top bar. This report is called “Cash Short Predictor

intro_cfPredictor.png

Now we explain where the cash flows come from.

CaFE utilize 2 sources for the cash flow forecast:

There are 2 sources for the cash flow: your accounting system and your Budget in CaFE.

They can be distinguished by the Status of each cash flow:

 

Source Status in CaFE
Your accounting system Authorised, draft, paid or partially paid
Your Budget in CaFE Planned

 

We will explain a little more in detail for each cash flow type.

From now on, we call transactions from your account system as "Actual Cash Flow", and from your Budget as "Planned Cash Flows"

Actual Cash Flow

In above example, an invoice with due date on 02/05/2024 with amount 19,800 GBP (include VAT) to is created, and it is shown in the Cash Flow as show above. The draft invoice is also shown in the same manner. All the invoices, bills and other cash related transactions are synced to CaFE.

Planned Cash Flow

On the other hand, if you have set a budget in CaFE, a cash flow transaction is shown in the Cash Flow, with the due date, which is automatically estimated from the past trend. In above example, you see a sales transaction on 03/05/2024 with total amount of 13,885 GBP to a customer.

intro_plannedCf.png

Note that the status is “Planned”. This means that the transaction is set up in the linked Budget, which is one of the main functionalities in the CaFE. In the Budget, you can specify the amount, date, contact in an intuitive and simple-to-use interface. The Budget is explained in later section.
The amount in planned cash flow takes account into the corresponding actual amount, which is amount of transactions, which is set in the accounting system.
For example, if you have issued an invoice in your accounting system, it is deducted from the amount in the Budget and the remaining amount (GAP) is shown in the cash flow. There is an option to handle the planned cash flow, such as hiding GAP or changing the date. Details are described in this link.

 

Cash Flow Risk

In the Cash Flow Predictor, you may see yellow or red circle(s) in the graph in some situation, as in the screenshot below. This implies a risk of cash shortfall in your business.
In a real business, it sometime (or often) happens that customers pay later than due date, and which may result in cash shortfall. In order to avoid such accidents, one has to pay attention not only cash balance, but also size of the transactions and payment timings.
CaFE will automatically find the invoices, which may cause the cash shortfall if the payment is not done on time.
In the screenshot below, you may notice that the cash position (purple line) is not dip into negative, but still shows the risk of cash shortfall. This risk is recognised by the so-called scenario analysis.

intro_criticalTimingGraph.png

If you see the red circle, this means that cash shortfall would happen, if all the invoices in preceding 1 week are not paid.  If you click the red circle, the background of the risk is displayed, as in the sample below.

intro_criticalTimingRed.png

The invoice, which may cause the cash shortfall, will be highlighted with red bar, and the possible cash shortfall timing is greyed out. The simulated cash flow is show on under “Worst Case”, where the red marked invoices are not taken into account for the cash flow.
In order to avoid the cash shortfall, you may also collect the over due invoices, if any. Under “+ Overdue Ins”, payments of the current overdue invoices are taken into account. In the sample above, cash shortfall will be avoided when the overdue invoices, whose total amount being 79,626 GBP, are collected before the possible cash shortfall timing of 27/07/2024.

The yellow mark, on the other hand, takes invoices in preceding 4 weeks into account.

intro_criticalTimingYellow.png

There are also red or yellow cross mark (X) in CaFE, which correspond to the cash shortfall of individual bank account.
For more detail, please check out the detailed manual here.

 

Email Notification

An email notification is automatically sent, when cash flow risk is recognised during automatic cash flow update in CaFE, which is scheduled just after the midnight.
As default, notification is sent when red circle is recognised (see previous section). You can change the setting in Alert Preferences (click Bell mark, then click “Alert Preferences”) under “Cash Shortfall in 3 Months”.

intro_notification1.png

 

intro_notification2.pngThere are also other criteria for the notifications:
• Lowest in 30 Days: if cash position will dip below certain value
• Unreconciled Count: if count of unreconciled bank statement lines reaches certain value
• Unreconciled Amount: same for the amount
You can also stop sending notification by setting Email Notifications button on OFF.

For more detail, please refer to here.

 

Budget

Our Budget is the main component in the cash flow in CaFE. With Budget, you can plan future cash flow and monitor actual transactions.
We have 3 types of the budget: Quick Cash Flow Plan, Basic Budget or Full Budget.

If you newly signed up to CaFE, a Quick Cash Flow Plan is automatically created. You can update the automatically created Quick Cash Flow Plan, or create new ones.
You may read a document to see which type of budget fits your business here.
Now we quickly look into the Quick Cash Flow Plan, which is the simplest budget in CaFE. You may plan your cash flow with the usability of Excel and automatic monitoring function.

intro_budget.jpg

The Budget is created based on the past actual data. You can change the amount with the usability of Excel. Some of the practical features are:
• Sales and Cost of Sales can be planned by contacts
• Automatic VAT return estimation
• And expenses can be managed by chart of account
• Loan simulator

When you hit the "Edit" button in the budget, it is ready to be modified.

For more details, or more advanced Basic Budget, please check out the manual here.

If you want to check the Full Budget, please refer to the manual here

 

 

Mobile CaFE

Mobile CaFE is the mobile version of CaFE, which will be shown when you access your CaFE account with your mobile phone.

This will quickly inform you of information which is important for your daily business. As well as the selected information in the desktop version, special functionalities are available only for Mobile CaFE:

  • Summary
    • Cash Alert
    • Overall Balance
    • Cash Flow
    • Yesterday's Balance Review
    • Unreconciled Items
    • Overdue
    • Credit Card Balance Forecast (* Mobile CaFE Only)
  • Action Alerts
  • Sync

(* Credit Card Balance Forecast predicts the balance at the next credit card repayment.

In the link on Credit Limit amount, the credit line can be set. The repayment date can be set in the bank account list in the desktop version. )

The cash flows from your Budget are of course reflected in the Cash Flow. If you want to edit the Budget, please go to the desktop version. 

 

intro_mobile.png

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