In a spreadsheet it’s not easy to create good cash flow projections. As a result, we have compiled a quick checklist for Calxa users.

 

Cash flow Projection Checklist

Follow this step-by-step guide to see how easy it can be in Calxa:

1. Create a Profit and Loss Budget

You’ll need to create a budget for the current financial year and next year in order to produce a 12 month cash flow forecast. Use the Budget Factory to create these budgets quickly in Calxa if you don’t already have them.

 

2. Now create a Balance Sheet Budget

Unlike a spreadsheet, this is fairly simple in Calxa. All the difficult accounts (GST, PAYG, Debtors, Creditors, Bank) are calculated for you. You just need to review things like the purchase of new assets, credit cards and cash management accounts, loans and income received in advance.

 

3. Timing is also something that gets complex in a spreadsheet

Traditionally most people make simplistic assumptions such as receiving all debtors in the month following invoicing. Fortunately Calxa allows much more complex arrangements, with the default settings based on statistical analysis of your average Debtor Days and Creditor Days. Wages are split between net pay and tax withheld and taxes are paid according to the schedule you set.

 

4. Presenting your cash flow projection is almost as important as creating it

You need to present something that is appropriate and understandable to your audience. Charts are a good way to start for boards and senior management whilst reports with varying levels of detail are ideal. for those who prefer numbers.

 

5. Finally review, revise and improve

Cash flow forecasting is something that you get better at with practice. It’s a great way to get to understand the workings of your organisation and to see what drives its performance. Repeat the process regularly, revise your budgets and settings and you will produce solid, accurate forecasts that you can use for informed decision-making.

 

Step-by-Step Guide to Cash flow Projections

Read our full Step by Step Guide to Cash flow Projections.