Quick Guide for Quick Cash Flow Plan / Basic Budget

Nori -

In this article, the basic functionalities in the Quick Cash Flow Plan and Basis Budget (hereafter referred to as Budget).

You may also play around with your Budget in CaFE. 

Don't worry, you can create multiple Budgets, and you can delete unnecessary Budgets at any time.

So, let's start!

 

Table of Contents

 


 

See the past/forecast data

In the Budget, you may see what has happened, as well as what will happen in "View Mode".

If you see the following text in the header area, then you are in this mode:

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If you see the following button, then you are now in "Edit Mode", which shows the budget amounts:

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See Cash Flow

Your cash flow can be seen in Quick Cash Flow Plan or "Cash Flow" tab in Basic Budget, it looks like this:

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To see past or future, move the scroll bar.

 

The monthly amount is shown in each "cell". Its overview pops up when hovering the cursor over the cell:

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- Budget: the budget amount

- Actual: Paid: the paid amount

- Forecast: the forecast amount, which is not overdue

- Overdue: the overdue amount

 

The amount in the cell is either:

- Actual amount in past months

- Actual and Forecast amount in the current month

- Budget amount in future months

 

When clicking a link on the cell, related transactions are shown.

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TIP!: "Right-Click" the cell

When you "Right-Click" the cell, you will see several useful options. 

If "Show actuals in current/previous period" is selected:

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then simple overview report pops up:

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At the bottom, summary data is shown.

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In the "Total", the cash flow amount summary is shown.

In the "Balance", the bank balance is shown.

- Budget: Bank Balances based on Budget amounts. The starting balance is taken from the actual starting balance in the current fiscal year.

- Actual & Budget: Bank Balances based on Actual and Budget. The actual closing balance is set until the end of the previous month (for example, actual bank balances are set until Jul 2021 when today is 2/8/21 ). For the current month, Forecast and Actual amounts (see above) are added to the actual bank balance of the previous month. Budget amounts are added afterward.

 

See Sales Plan

In the Basic Budget, you will find one special report for invoices, which are related to sales and cost of goods sold, as below:

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If you click the "Cash Flow Plan" tab, then a report is shown, which is almost identical to Quick Cash Flow Plan.

 

The fundamental difference between the "Sales Plan" tab and the "Cash Flow Plan" is that the "Sales Plan" uses the Accrue Date, which is the date of issuing the invoices or bills. For example, if an invoice was issued on 01/07/2021, and paid on 01/08/2021. Then, the invoice is found in "July 2021" in "Sales Plan", while in "Aug 2021" in "Cash Flow Plan".

 

 

Edit your budget

Here, the basic functions are explained by modifying future sales figures.

 

Edit sales amounts in Quick Cash Flow Plan

Firstly, please click the "Edit" button.

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Then buttons are changed to:

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And the value in each cell shows the Budget Amount, which you can edit. Now you are ready to update the values!

 

Single value update

Let's increase the sales amount in Aug 2021 for "C Winter Sports Shop".

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After clicking on the cell, you can directly input your updated amount. Say, 12,000. Please note that this amount includes VAT

By hitting the enter key, the new amount is set, and related amounts are automatically updated, which are marked as small triangles on the left-top of the cell, as seen below:

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The VAT is also automatically updated.

You can simply continue editing other cells.

Please note that you need to click the "Save Changes" button to save your changes.

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The small red triangles will disappear when the saving is done.

If you want to view the actual data, click the "Back" button.

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Update multiple amounts at once

If you "Right-Click" a cell in edit mode, the following options appears:

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When you select the "Edit multiple cash flow amounts", then a special update screen pops up:

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If you want to increase sales amount from August 21 to December 21, set values as follows, then click "Simulate". This looks like this:

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If you are happy with this, click "Apply changes to the plan", then those values are set in the main report.

Please click the "Save changes" button to save the all changes.

 

TIP!: Add, Subtract or Overwrite

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If you click the "+" sign, several options appear:

- Add: add to the current amount

- Subtract: subtract from the current amount

- Overwrite: overwrite the current amount with new input

 

Edit sales amounts in Sales Plan

The sales amount in the Sales Plan can be also after the "Edit" button is clicked.

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Two sections, "Invoices/Bills" and "Cash Flows", are In the "Sales Plan" tab above.

Invoices/Bills:

The amount of issuing invoices/bills is set here. Note that this does NOT contain the VAT amount. It also shows the "Gross Profit" and "Gros Margin".

- Gross Profit: This is calculated by subtracting the sum of the issued amount in "Cost of Sales" from that of "Sales". Note that it may be different from the gross profit in Profit & Loss, as the depreciation and certain accounting handling of cost of sales, if any, are not considered. 

- Gross Margin: This is calculated by dividing Gross Profit by the sum of Sales. If the sum of Sales is 0, then set to 0.

 

Cash Flows

The resulting cash flows from the "Invoices/Bills" are automatically calculated. Let's see how it is done in an example of the invoice amount on August 2021 of "C Winter Sports Shop":

1. payment timing of the invoice amount of 5,785 is calculated with "Due (+Months)", which is one month. In this case, the payment appears on September 2021.

2. VAT amount is added to the invoice amount to create the payment amount. The used VAT rate is shown in the "VAT Rate(%)", which is 20% for this customer, and the resulting amount is 6,942.

 

There are 2 basic editing options:

- Edit the amount in "Invoices/Bills":

Simply edit the value in the cell, or use "Edit multiple budget amounts" by "Right-Click" the cell and select the option:

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Its functionalities are almost the same as that of the Quick Cash Flow Plan.

Related amounts are updated automatically, and changed cells are marked with a red triangle.

 

- Set the payment schedule individually:

Sometimes, you need to set up the payment schedule for certain invoices/bills in detail, such as separate payments, etc. This can be done by the "Schedule monthly payments", which is available in option lists upon "Right-Click" the target cell:

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In the list below, you can set the cash flow amount separately. 

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The "Day" specifies the day of the month the cash flow. 

Hit the "Update" button and the cash flows will be updated.

Note that this can be done when all the other changes in the budget are already saved.

 

Edit "Others Incomes / Expenses" (Common)

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This is cash flow can be found in the Cash Flow tab in the Basic Budget, and the main screen in Quick Cash Flow Plan. Basically, all cash flows, which are not categorized in other categories.

- Incomes (Cash-ins): cash-in transactions, which are NOT sales, loans, or VAT, are set here.

- Expenses (Cash-outs):  cash-out transactions, which are NOT the Cost of Goods Sold, loans, VAT, or corporation tax, are set here. The typical example is the operational cost, such as rent and salary.

The budget amount in the future is calculated based on the budget creation setting:

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- monthly average of actuals: the average of the plan start and previous month are calculated and set to future budget

- actuals: set the actual amount in the previous year

Please note that fixed asset purchases or dividend payments are also set here

 

Those can be modified in the same manner as for the Sales in Quick Cash Flow Plan.

 

Add new Loan (Common)

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This category is specific loans and repayments. Upon the creation, entries for loans, which have the past transaction in the budget period, are automatically created, as in the example below. The related costs, such as interests, are also included.

For existing loans, you may update the cash flow in the same manner as "Other incomes/ expenses".

 

If you want to plan a new loan, this can be added as follows.

1. Click the plus button in the Loan + Interest section below in the Edit Mode

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2. Input the loan amount, starting date, repayment months, and interest rate

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- Amount you wish... : please note that this does NOT include the interest or other related costs.

- from: the day, when you plan to receive the money. This is used for the following repayments

- months

- Interest Rate: this amount can be found in the information by the loan provider. Sometimes it contains other fees than the interest, and is referred to as "APR".

 

3. Click the "Simulate" button, then the repayment schedule is created based on the conditions.

LoanSimulatorRepaymentSchedule.PNG

We simulate the repayment so that the monthly payment amount is constant.

- Loan: the cash flow amount, which is related to the loan. You can see that the cash-out amount increases as time goes. This is because the interest payment is higher than that in the following period. 

- Interest: the cash flow amount, which is related to the interest. You can see that the cash-out amount decreases as time goes.

- Cash Flow: the total cash flow for each month.

- Balance: this shows the remaining loan balance. It decreases slowly at first, then sharply as time goes by.

You can change your loan conditions, and simulate again.

 

4. When you are happy with the repayment plan, then set:

- Loan Account: an item in your Chart of Accounts, which is linked to the loan. If you need a new Chart of Account item, please create one in your accounting software as it requires. Then do the sync-all in CaFE. We recommend putting "Loan" as a part of the name of the item.

Please also see Cannot find my loan account if you still cannot find it.

- Receiving/Repayment Bank A/C: select the bank account, with which cash flows are set.

 

5. Click the "Add this loan to the plan" button, then this loan plan will be added to your budget.

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You can also edit a cash flow amount in each cell, or update multiple amounts at once by using Edit multiple cash flow amounts feature afterward.

Note that currently, the loan simulator works only for your home currency base.

 

Edit Corporation Tax (Common)

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Upon creation of a budget (Quick cash Flow Plan / Basic Budget), the corporation tax for the future is simply repeated from the past. That is, if you have paid corporation tax on December 2020 with the amount of 2,000, then the amount for 2021 is simply set to 2,000.

The actual amount, which is sent from the tax authority, can be input into the budget.

Please note that this cannot be automatically updated as business goes by.

 

Edit Settings (Common)

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In "Edit Mode", you can change several settings for cash flows.

Basically, you can set the following:

- Payment Bank A/C: The bank account, where the cash flow occurs in our Cash Projection (explained later in this document). 

- Payment Day: The day of the month, when the cash flow occurs in our Cash Projection 

- VAT Rate: Applied VAT rate. This is estimated from past transactions. For "Others/Incomes, Others/Expenses", this is the average value from the past. This is because the VAT rate might differ among transactions. You can see how the value is calculated in the "How was this rate calculated?" section for those cash flows. You may change this value as you want.

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Create/Recreate the next period (Common)

Create the next period

On the next day of your fiscal year-end, the time scope of your budget is moved forward.

For example, if your fiscal year-end month is January and today is 31/01/2021, the plan shows from 01/02/2020 to 31/01/2022, but on the next day, it is from 01/02/2021 to 31/01/2023.

It looks like this:

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Note that the plan cannot be edited until the next period is created, but don't worry, it is quite simple!

Firstly, select the "Create next period" button.

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Now you can set the % changes, as is done upon the first budget creation.

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And that is all! Now you are able to edit the budget as before.

 

Recreate the next period

You may want to update the plan based on the current actual business situation.

It can be easily achieved by recreating the next period.

This function will recreate the budget in the next fiscal year.

For example, if your fiscal year ended in March and today is 01/09/2021, then the budget from 01/04/2022 to 30/03/2021 will be recreated, without changing anything in the preceeding budgets.

Firstly, select "Recreate next period" from the list as below:

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Then the following screen pops up. You may change the assumption as needed.

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Click the "Create" button, then the budget for the next fiscal year is recreated.

 

About VAT

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VAT is automatically calculated in CaFE, when your company is registered for VAT return.

This amount is automatically updated when you updated the budget.

 

NOTE: Some limitations in the VAT function:

- Cash-based only: you may know that there are 2 types of VAT calculation: Cash-based or Invoice-based (or Accrual-based, Issue-based, etc..). As Quick Cash Flow Plan and a part of Basic Budget does not consider the issuing timing, we simply use the Cash-based, no matter how it is set in your accounting system.  

- VAT settings may not be correct: while the accounting systems allow limited information about VAT, the VAT settings might be different from the actual. This discrepancy may happen mostly in the Closing Timing. The account closing timing for your VAT might be at the end of March, June, September, and December. But April, July, October, and January may be set in CaFE.

In this case, you can set the correct one from Budget settings.

These settings can be accessed in "View Mode", as follows

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Check your Close Timing, and simply select the correct one, if it does not the actual one.

 

Submit Timing means that when cash flows for the VAT occur. If the return cash flow occurs 1 month and 7 days after the closing timing, then set as above. For example, suppose that you have the VAT return of +500(receive from the tax authority) at the end of March. Then this amount will be paid to your bank account on the 7th of May.

Please set the values based on your business procedure to see the realistic VAT return cash flows.

 

 

See the cash flows in our Cash Projection

One of the most powerful features in CaFE is that the cash flows in the budget are integrated to the daily Cash Projection.

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The cash flow amount will be shown with the "Planned" state as above.

If some actual transactions are already issued for the planned cash flow, it is automatically deducted, as below.

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In this sample, the planned amount of 18,981.65, and the actual amount is -3,295.20.

And only the difference is shown in the planned cash flow. 

Note that "actual amount" contains both the ones, which are already paid in the planned month, and ones, which are issued, and cash flow is expected in the planned month. 

If the gap between the actual amount and the planned amount is not 0, then the gap will appear even after the planned payment date is passed. We call this "Gap Tracking", and this can be deactivated. This will be explained later.

 

How to monitor a Budget

Firstly, please select a budget, which you want to monitor in the cash projection.

In "View Mode", the following button is shown.

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Simply click it, then it is ready to monitor. Then go to the "Cash Projection" or "Cash Short Predictor":

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Then click the following button:

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Now you can see the planned cash flow in your cash projection!

 

How to change the payment timing and monitoring setting in Cash Short Predictor

You can change the individual payment timing and monitoring setting for planned cash flow from "Cash Short Predictor".

Note that all the changes are reflected in cash projection after "Recalculate Projection" is done.

Firstly select the planned cash flow, which you want to edit.

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- Change Date

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Just select the new payment day, then save. If you tick the "Apply the change to all..", then this payment day will be set to future ones.

- Stop Monitoring:  The planned cash flows of this category, including future ones, will not appear anymore. You can start monitoring again in the Budget Screen.

- Stop Gap Tracking: The planned cash flows do not track the gap. That means, if any actual or forecast transaction is found for the category in the month, planned cash flow does not appear anymore. This setting can be changed afterward.

 

How to change the individual monitoring setting in the Budget

Monitoring settings can be changed in the "View Mode" in the monitored Budget.

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If you click the link in the cash flow name, the monitoring setting appears.

After updating it, do "Recalculate Projection" in "Cash Short Predictor" to reflect the change.

 

How to manage foreign currency payments

If you have a foreign currency bank account and want to see the cash flow from the budget in the cash projection, it can be simply done by selecting "Payment Bank A/C" to the foreign currency bank account.

1. Click the "Edit" button in the budget.

2. Open the setting screen by clicking the name or category, then set the foreign bank account.

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3. Go to Cash Short Predictor, then click "Recalculate Projection". Then select the CCY to the corresponding currency, then the cash flow is shown, as below:

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Exchange Rate

The amount in foreign currency is calculated by using the exchange rate inside the CaFE.

The exchange rate is in the "Currencies" tab in Budget Settings.

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It is currently estimated from the bank statements and balance sheet data from your accounting system:

Exchange Rate = (Yesterday's closing balance of the bank account - Unreconciled bank statement lines in last one month) / Amount in the Balance Sheet.

If the estimated exchange rate is not properly calculated, we set 1 instead.

This exchange rate is updated upon sync, but you may fix the exchange rate with your value:

1. Input your exchange rate

2. Set "Lock" to on, as below.

3. Save

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The change will be reflected after the "Recalculate Projection" is clicked in the Cash Short Predictor or sync.

 

 

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