Make Better Decisions for Your Agency's Future by Forecasting Cash Flow

There are a number of reasons why your agency should be keeping a close eye on cash flow. Cash flow allows you to pay your bills, buy supplies, pay your employees, and keep your business operating from day to day. But because project-based agencies have a pipeline that fluctuates, and because of that your capacity may not allow you to juggle a large amount of projects at a time, it can be challenging to maintain that important balance of incoming and outgoing cash.

That’s why it is more important than ever that you are not only able to keep that balance, but you are able to predict your ability to do so months in advance. 

WorkBook’s Cash flow forecast submodule in the Finance & Administration module is a powerful tool for accurate, short-term forecasts, typically one to four months  in advance. It automates the time-consuming elements of a cash flow forecast, and then supplements it by manual inputs.

Before you can create your first cash flow forecast, you need to understand what you’re looking at. 

The Cash Flow Forecast grid consists of three sections.

Green Section

These rows display the system-calculated cash income. You cannot change the values in these rows.

• Incoming payment, not due:  Refers to non-overdue account receivables.
• Overdue incoming payments: Refers to overdue account receivables.
• Subscription: If you use the Subscriptions module, WorkBook calculates expected cash from future billings. 
• Budgets (or Price Quotes) approved internal (40): Refers to the price quotes on all the planned jobs in WorkBook with a status of 40 (approved internally).
• Budgets (or Price Quotes) approved internal (50): Refers to the price quotes on all the planned jobs in WorkBook with a status of 50 (approved externally).
• Budgets (or Price Quotes) for approval: Refers to the price quotes on all the planned jobs in WorkBook with a status of 20 (for approval).

NOTE: WorkBook derives the values in the Price Quote fields above from the billing plan on the individual Price Quotes. Depending on the price quote settings in the Resources module or Jobs module, the VAT and sales tax amounts are included in the forecast numbers.

Red Section

These rows display the system-calculated cash expenses. You cannot change the values in these rows.

• Outgoing payments: Refers to account payables.
• Non-posted vouchers: Refers to creditor vouchers (invoices) currently in the workflow and yet to be posted.
• Open purchase orders: Refers to purchase orders that await invoices from creditors.

NOTE: Depending on the supplier settings in the Resources module, the VAT and sales tax amounts are included in the forecast numbers for non-posted vouchers and open purchase orders.

Yellow Section

These rows display the income or expenses that you enter manually depending on your financial workflow. 

• Salaries: The total employee salary for the month.
• Taxes: The cash outflow made when making your tax payment. 

NOTE: If you want to exclude specific cash income or expense types from a cash flow forecast, clear the check boxes for those income or expense types. WorkBook automatically updates the forecast. For example, you may want to exclude Budgets (or Price Quotes) with statuses of 20 and 40 because they are yet to be approved by clients.

The rows below the yellow section effectively calculate that month’s expected Cash movement (or flow) and End balance. 

Now that you know what you’re looking at, you need to accomplish a few set up tasks before you can successfully create a cash flow forecast. 

Set Up Cost Types

Depending on your role in WorkBook, you can create the cost types for those income or expenses seen in the yellow section for which you have to manually account in your forecast. This can be done using the Cost types setup tab in the Cash flow forecast submodule of the Finance & Administration module.

1. On the main module toolbar, click Finance & Administration. 
2. Use the drop-down list above the left pane of the Finance & Administration module to select the company that will use the cash flow forecast for which you want to set up cost types. 
3. In the left pane of the Finance module, click General ledger » Cash flow forecast.
4. In the Cash flow forecast grid, click the Cost types setup tab.
5. In the grid, double-click a row to add a cost type. Enter the following information:

• Post: The post number must be between 300 and 399.
• Income / cost description: A description of the income/cost type.

To delete a cost type, right-click the cost type row and click Delete selected rows on the context menu. To select multiple rows at once for deletion, use Ctrl+Shift+Click. To select all rows for deletion, use Ctrl+A.

Now that you’ve set up the costs that will populate the yellow section, you can now create, delete, approve and view information on cash flow forecasts. 

Again, begin by accessing the Finance & Administration module, click General ledger » Cash flow forecast, and select the company to which the cash flow forecast is associated. At the top of the Cash flow forecast grid, open the popup menu and click on the action of your choice.  

Create New Cash Flow

When creating a new Cash flow forecast, click “New cash flow” and in the dialog box that appears, enter the following information:

• Description: The cash flow description. For example in the screenshot above we used “CF-Aug 2019 Monthly.”
• Opening balance: The opening balance, including cash and accumulated bank balances.
• Date type: Select if you want a weekly or monthly forecast.
• Report date: Select the date when you want WorkBook to generate the cash flow forecast report.
• Start date: Select the start date for the cash flow forecast.

Include old not invoiced billing plans: Select this option if you want to include billing plans that are past their due dates but are yet to be invoiced. By default, WorkBook excludes such billing plans in cash flow forecasts.

Once you’ve clicked the green “OK” button, WorkBook displays the new Cash flow forecast in the grid.

Delete Cash Flow Forecasts

From the drop-down list next to the grid tabs, select the Cash flow forecast that you want to delete.

Click “Delete cash flow” in the drop-down menu, and when WorkBook asks you if you want to delete the selected cash flow forecast, click “Delete.”

Approve Cash Flow Forecasts

To approve a Cash flow forecast, you must first be designated as an Approver of the forecast.  As before, select the cash flow forecast that you want to approve. Click “Approve cash flow” on the drop-down menu, and when WorkBook asks you if you want to approve the selected cash flow forecast, click “Yes.”

View Cash Flow Information

As before, select the cash flow forecast for which you want to view information. Click “Cash flow information” on the drop-down menu. The tab displays the cash flow information for the cash flow forecast, including the report date, the start date, and the date when the selected cash flow forecast was last recalculated.

View Cash Income/Expense Details

Use the Details tab in the Cash flow forecast submodule to view system-calculated, cash income/expense details for a cash flow forecast.

Again, select the cast flow forecast that you want to view income/expense details for and then navigate to the “Details” tab. The Cash flow forecast grid displays detailed information about each system-calculated expense/income type, including the following:

• Invoice number (for incoming payments)
• Voucher number (for outgoing payments)
• Due date
• Amount
• Debtor name (for incoming payments and subscriptions)
• Creditor name (for outgoing payments)
• Job number (for incoming payments)

Update Opening Balance

You can change the opening balance for a cash flow forecast. This is useful in case you entered an incorrect opening balance or if the available balance changed shortly after you created the cash flow forecast.

Again, select the Cash flow forecast for which you want to update the opening balance and click the “Update opening balance” icon next to the drop-down list. In the Refresh cash flow dialog box, enter the new opening balance and click “OK.”

Export Cash Flow Forecast Data to Excel or PDF

You can export your Cash flow forecast as an Excel-compatible or PDF file. 

Again, select the cast flow forecast whose data you want to export.

Click the header of the left-most column of the Cash flow forecast grid tabs, and click “Export grid data” on the popup menu.

In the Export data dialog box, select from the following options:

• Microsoft Excel Open XML Format Spreadsheet (XLSX)
• Text file (CSV or custom separator)
• Portable Document Format (PDF)

By default, WorkBook includes the header row and group data in the export. You have the option to clear the check boxes for these options. The option to include group data is useful only if your system supports data grouping. Otherwise, selecting or deselecting this option does not have an impact on the exported file.

Click “OK” and WorkBook generates the file and displays the file icon at the bottom of your browser.

Just click the file icon to open the file.

With the ability to create more accurate short-term cash flow forecasts, you are in a better position to take preemptive action to maintain the ideal balance of incoming and outgoing cash, and are more likely to keep your agency operational for the long-term.