Sometimes you need more than just plain vanilla cashflow settings.
Plain vanilla cashflow settings work for many situations but sometimes you need a little bit more. Sometimes you need to experiment, try something new. In Calxa, there’s a cashflow type assigned to every account and while the defaults work most of the time, there are good reasons to fine tune them sometimes.
Adding Chilli for some BANG (Making Big Changes)
Calculating receipts based on statistical analysis of your average debtor days makes sense. It’s based on actual historical records of how your customers pay you and that’s a reasonable indicator – generally much more reliable than basing it on the terms you set for them. Just because you ask for payment in 30 days doesn’t mean you’ll get it.
However, sometimes you don’t have enough information in your accounting file to calculate the average creditor days – our calculation relies on having at least on year of data – and sometimes you want to experiment (add a bit of Chilli to awaken the sensations) and see what happens if your debtor days were just 30.
Up until now there’s been the ability on some reports to change this for just that report but recently we’ve moved this to the Cashflow Settings. This means you can set it once and it will apply to all reports that use this calculation giving you consistency of results.
Seasoning with Salt & Pepper (the Smaller Changes)
There are times when you need more fine-tuning than dramatic changes. It’s the mellow seasoning with salt and pepper.
For example, there may be one income account for a product you always sell for cash. It doesn’t make sense to set that to Debtor Days – change it to a Profile, paid 100% in the current period. Turn on the advanced option in the Cashflow Forecast Settings, you’ll be able to set this as a number of days (such as 30 or 45) as well and it will calculate a profile for you.
Make sure you have the right schedules selected for your taxes and superannuation too. If your clients are paying GST quarterly (in Australia) choosing the right schedule can make a big difference. If they’re lodging through the Tax Agent portal, or electronically themselves, choose the February, May, August and November option.
If you want to know more about setting up your cashflow, our recent WebChat Step-by-Step Cashflow Forecasting is a must-watch!