Forecast Cash Flow form: options and information

Available in Microsoft Office Accounting Professional 2008 only.

A cash flow forecast is one of the most important tasks that a company can perform to ensure future success. When you run a cash flow forecast regularly, you have a moderately accurate idea of the future, so you can take prompt corrective actions if financial conditions change. These forecasts are also a key part of any business plan that you create, and they can be used by banking institutions when they consider your credit requests.

Although a Profit and Loss report that is based on accrual accounting is considered to show a more accurate picture of revenue and expense matching, there are certain items that may not affect the statement until future periods, but can affect your cash reserves in the present and near future. Revenues and costs and the resulting profits do not necessarily coincide with the associated cash outflows and inflows. Credit may be extended to customers, inventory must be replenished, your collection methods may be lagging, or new equipment may have to be purchased. Many profitable companies have failed because the planning for their cash inflows and outflows was deficient.

In the Forecast Cash Flow form, you can view and alter your company's cash flow forecast by using a variety of variables, such as adding new cash accounts, new receivables, new quotes, new expenses, and payables to vendors. It is important for you to remember that the Forecast Cash Flow form is just a tool, and it is designed to be manipulated. Nothing that you add, change, or alter has any effect on the books that you keep in Microsoft Office Accounting 2008.

Open the form

  • On the Company menu, click Forecast Cash Flow.

Form options

Forecast Totals

Forecast Totals shows an ending cash balance after the results of Known Cash Activity are summarized and changes are made in the Sales Forecast, Cash Inflows, Expense Forecast, and Cash Outflows sections for a selected date range.

Note: Known Cash Activity is the effect on cash balance by transactions that are already posted in Office Accounting 2008 for the time period between the current date and the end of the forecast range. Examples of such transactions are journal entries, checks to customers, vendors, or employees, or customer payments to you. It is possible for this amount to be negative, depending on the posted transactions.

Forecast Chart

This chart displays the cash balance as bars for individual time periods in a selected date range. For example, if the date range is between one week and one month, the time periods are shown as days; if the date range is between one month and a year, the time periods are shown as months; if the date range is more than a year, the time periods are shown as longer than a month.

Forecast Setup

Date range    Click the arrow next to Date range to select a date range (Next 7 days, Next 14 days, Next Month, Next 2 Months, Next 3 Months, Next 12 Months, or Custom) that you want to use for the forecast. The Custom option allows you to enter dates of your choosing in the From and To fields. You cannot enter dates in the From and To fields unless you select Custom. If you enter dates in the From and To fields without first selecting the Custom option, the Date range changes to Custom.

From    Click the arrow next to From to open the calendar and select the starting date of the date range. You can also type the date directly in the From field.

To    Click the arrow next to To to open the calendar and select the ending date of the date range. You can also type the date directly in the To field.

Beginning Balance tab

If you want to add a new account to change the cash flow beginning balance, click the first empty row of the table, type the applicable information, and then press ENTER. You do not have to type information in all fields; you are adding dummy accounts that do not affect your actual books.

Option

Description

Check box

Select a check box to include an account in the forecast. To remove a selected account from the forecast, clear the check box.

Name

Displays the name of an account.

No.

Displays the account number.

Balance

Displays the balance of an account.

Sales Forecast tab

All open quotes and all sales orders in the system that are not invoiced or partially invoiced are listed in the Sales Forecast table. Partly invoiced sales orders show the amount that has not yet been invoiced. All sales orders that have anticipated delivery dates that fall before the To date in the selected date range are selected. To add a sales order or a new quote to the cash flow forecast, click the first empty row of the table, type the applicable information, and then press ENTER. You can sort all the columns in the Sales Forecast table.

Option

Description

Check box

Select a check box to include a sales order or quote in the forecast. To remove a line item from the forecast, clear the check box.

Customer Name

Displays the name of a customer associated with a sales order or quote.

No.

Displays the document number associated with a sales order or quote.

Est. Close Date

Displays the estimated closing date of the quote or the estimated delivery date of a sales order.

Amount

Displays the dollar amount of a quote or sales order.

Cash Inflows tab

All outstanding invoices or credit memos in the system are listed in the Cash Inflows table. Invoices that have a due date and credit memos that have a document date prior to the end of the selected date range are selected. To add a new receivable to the cash flow forecast, click the first empty row of the table, type the applicable information, and then press ENTER.

Option

Description

Check box

Select a check box to include an invoice or credit memo in the forecast. To remove an invoice or credit memo from the forecast, clear the check box.

Customer Name

Displays the name of a customer associated with an invoice or credit memo.

No.

Displays the document number associated with an invoice or credit memo.

Est. Receive Date

Displays the estimated date to receive payment from a customer.

Amount

Displays the dollar amount of an invoice or credit memo.

Expense Forecast tab

All purchase orders in the system that are not received or partly received are listed in the Expense Forecast table. Partly received purchase orders show the amount of the purchase order that is not yet received. All line items that are not received or partly received with a delivery date prior to the end of the selected date range are selected. To add a purchase order to the cash flow forecast, click the first empty row of the table, type the applicable information, and then press ENTER. You can sort all the columns in the Expense Forecast table.

Option

Description

Check box

Select a check box to include a purchase order in the forecast. To remove a purchase order from the forecast, clear the check box.

Vendor Name

Displays the name of a vendor associated with a purchase order.

No.

Displays the document number associated with a purchase order.

Est. Payment Date

Displays the estimated payment date of a vendor bill that results from a purchase order.

Amount

Displays the dollar amount of a purchase order.

Cash Outflows tab

All payables to vendors and sales tax agencies and all vendor credits in the system are listed in the Cash Outflows table. Payables that have due dates prior to the end of the selected date range, based on an accounts payable (A/P) Aging at the end of the period, are selected. To add a new payable to the cash flow forecast, click the first empty row of the table, type the applicable information, and then press ENTER.

Option

Description

Check box

Select a check box to include a payable in the forecast. To remove a payable from the forecast, clear the check box.

Vendor Name

Displays the name of a vendor associated with a payable.

No.

Displays the document number associated with a vendor bill.

Est. Payment Date

Displays the estimated date to pay a vendor.

Amount

Displays the dollar amount of a payable.

Export forecast to Excel

You can export a cash forecast to Microsoft Office Excel to take advantage of Excel analytical tools by clicking Export to Excel Excel on the toolbar. The forecast appears as an Excel workbook with the following worksheets:

Forecast Totals

Beginning Balance

Sales Forecast

Cash Inflows

Expense Forecast

Cash Outflows

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