This guide covers the cash flow forecast. The cash flow forecast provides an overview of the company's financial status and current and future liquidity. It includes graphics and a table that show liquidity and operational cash flow. The forecast assists in company decision-making and financial management.
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Overview and permissions
The cash flow forecast helps company decision-makers form an understanding of the company's current and near-future liquidity. Based on the information, decisions can be made on actions to achieve the desired situation. Cash flow indicates the company's liquidity, i.e., how much money you have available right now for paying bills, loan repayments, and salaries.
The cash flow forecast is automatically available to all companies using Accounts Payable. To ensure the forecast is as up-to-date as possible, we recommend that companies use daily bank statements. Cash flow considers the balance of the ledger and bank statement, not vouchers or bank statement transactions.
The cash flow forecast is included in the following packages: Basic, Core, Professional, and Premium. The cash flow forecast is not included in the Light package.
To use the cash flow forecast, you need either:
A) Payment rights for purchase invoices + basic functions of Accounts Payable and views and lists of Accounts Payable (read rights are sufficient)
B) Company user profile (can view the view but not drill down into events).
C) Accountant role KP + additionally editing rights in the accounting section (i.e., all rights to accounting, this is ready in the profile "All rights").
The cash flow forecast graphics can be viewed from the Netvisor start view. The "Go to cash flow forecast" link below the graphics opens the full cash flow forecast view. The cash flow forecast view can also be accessed by opening "Financial management > Reporting and monitoring > Cash flow forecast". The sidebar structure of the cash flow forecast consists of 4 parts: Settings, Graphics, Table view, and Summary.
Settings
At the top, you will find the action buttons related to the page settings. In the settings, it is possible to define which data is shown in the graph, update the forecast data, select the desired review frequency and time period. Additionally, you can set user-specific settings to suit the company's purpose.
"Update forecast" function updates the graphics and table with the latest data available from the system, taking into account the user's own entries.
The forecast is automatically updated once a night with the previous day's events. The update forecast function is needed if you want to update the forecast immediately when changes have been made to events affecting the forecast.
"Day", "Week", and "Month" selections allow you to choose the level of detail for reviewing data. Additionally, data can be reviewed by selecting the desired time period in the "Date" fields. The setting affects both the graphics and the table.
"Cash flow forecast functions" menu allows you to define the following:
Restore default time period: Option to restore the forecast's default time period, which shows the forecast 1 month back and 12 months forward.
Cash flow forecast settings: Option to influence how the system processes and displays data with a few settings.
Delay in collection of sales invoice means how quickly it is believed that the customer will pay the invoice in collection. This affects how long the invoice is shown in the cash flow forecast in relation to the due date if the invoice has reached the collection stage. If the invoice is in any other state than collection, this option does not affect the visibility of the invoice in the cash flow forecast.
The timing of the sales invoice in collection in the forecast is calculated as follows:
Original sales invoice (Due date OR invoice date) + Delay in collection of sales invoice.
Due date OR invoice date means using the invoice due date if set, otherwise the invoice date is used as the default basis.
So, invoice due date + default 14 days (Delay in collection of sales invoice)
And if this calculated date falls into the past, it will remain as the current day until the invoice is paid (never goes into the past, either current day or future)
If you leave Delay in collection of sales invoice at zero, the timing of the invoice in collection in the forecast is the same as the original due date or date.
General settings
Show historical data and Forecast length selections are important; if an event falls outside these periods, it will not appear in the forecast. The selections also affect the review period, as the cash flow forecast's Restore default time period retrieves data from these fields.
Consideration of bank account credit limit in the forecast: This affects, among other things, the liquidity curve in the cash flow calculation. The selection takes into account if the bank account has a credit limit, meaning the bank account can go negative by the agreed amount with the bank. The credit limit increases liquidity by the remaining credit limit if the bank account has this agreed with the bank.
Management of set exceptional dates: Management of dates that the user has modified for payments and/or receipts through the forecast (affect only the cash flow forecast calculation, not the event itself). Settings can be made, modified, and deleted through this function. If modifying the predicted day of the event is not active on the cash flow forecast event itself, but the function appears grayed out, the modification or deletion must be done from the Calculation exceptions view:
Management of own events: Management of the user's own entries. Entries can be made, modified, and deleted either through this function or directly from the table/graphics. When adding own events to the cash flow forecast, the amount must be defined as negative or positive depending on whether the event is an expense or income. The event is removed from the cash flow forecast when the option to remove the event after the payment day is checked and the desired event date is given. Alternatively, the own event must be manually removed at the desired time. The program cannot link the own event to the actual event that has arrived in the program.
Management of bank accounts: Shows which bank accounts are considered in the forecast calculation and with what balance. The balance is always checked from the latest bank statement or if the balance information has been separately updated, then the latest updated balance information is used. Additionally, the balance can be updated directly to the cash flow forecast. The view also shows the available balance on the account.
Graphics
The most visible section in the forecast is the graphical representation of the data, which is formed from the data available from the system and the user's own entries.
Graphics functionalities:
- At the top, there is an option to select the data shown in the columns; the selections do not affect the liquidity and operational cash flow curves.
- From the columns and curves, there is an option to drill down into the events from which the data for that time period is formed (HRM drilling is limited for security reasons).
- During drilling, there is an option to modify the data shown in the cash flow forecast (does not affect the event, i.e., modifying the date through the "Modify event forecast date" function does not make changes to the sales invoice). An exception is the purchase invoice, where the forecast date is shown (does not affect the due date) both on the invoice and in the Accounts Payable view. This is so that the company can better plan its payments if desired. More about the forecast due date later in the article.
- Changing the time period with the selector at the bottom of the graphics and directly painting the desired area from the table.
Table view
A tabular representation of the data, which is formed from the data available from the system and the user's own entries.
Table functionalities:
- Drilling down into events
- Creation, modification, and deletion of new events and user's own entries
- Own events appear in the forecast in the event category where the user has placed the event.
The amounts shown in the table are composed according to the following principles:
Sales
Sales invoices: Sales invoices show in the ledger the invoices due that week as open, as well as overdue, reminded, noted, in collection, and in Visma Duetto. The sales invoice appears when the invoice is created. Unsent invoices are also visible, but invoices in draft status are not visible. The forecast date is the invoice due date + 2 banking days. When the due date has passed, the current day is used as the due date. An exception is factoring invoices, where the forecast assumes the amount is received 3 banking days from the invoice date. Credit invoices do not appear in the cash flow forecast unless they are allocated to the credited sales invoice. When the credit invoice is allocated to the sales invoice, neither the sales invoice nor the credit invoice is shown in the cash flow forecast. If it is a partial credit, the charge invoice is shown in the forecast according to the open amount after allocation. If a payment reminder or notice has been sent for the sales invoice, it is calculated in the background from the latest sending + 13 days, and the invoice appears in the cash flow forecast based on this in the week it falls.
Sales orders: Sales orders appear according to the order due date. (Sales offers are not considered in cash flow). When the order is invoiced, the order is removed, and the sales invoice remains in the cash flow forecast. If the order is partially invoiced, the sales order appears in the cash flow forecast until the order is fully invoiced.
Receipts: Receipts consist of receipts received during the current week. The receipt must be positive; credit losses are not considered. The cash flow forecast shows manually made receipts for the invoice.
Contract billing: Shows invoices formed through contract billing service baskets, whose due date or forecast due date is that week. The view shows the basket amount also in the future, even if the basket billing has not yet started and the basket is in waiting status. When invoices are formed from contract billing, they then appear in the cash flow forecast under sales invoices.
Recurring billing: Recurring billing shows invoices formed through recurring billing, whose due date or forecast due date is that week. The cash flow forecast also considers invoices that have not yet been formed from recurring billing but are coming into the system through automation.
Purchases
Purchase orders: Purchase orders show undelivered purchase orders that are open that week. The date for the forecast is calculated from the purchase order lines' furthest future delivery date + net days of the payment term. The purchase order is treated as one order, and if there are undelivered lines on the purchase order, the purchase order is shown in the cash flow forecast based on the latest delivery date line + supplier's payment term. When the purchase order is allocated to the purchase invoice, it is removed from the forecast. Archiving the purchase order also removes it from the cash flow forecast.
Purchase invoices: Purchase invoices show all invoices due that week and previously due invoices. Purchase invoices are visible even if they are unprocessed or unaccounted. The user can choose from the cash flow forecast settings whether to consider cash discounts in the amounts. Additionally, purchase invoices have special cases on how they are considered in the forecast:
- The cash discount date is used until the invoice has a cash discount available.
- The due date is used normally until the due date has passed. When the due date has passed, the current day is used as the due date.
- The forecast due date is used if the user has changed the forecast due date on the invoice. This change replaces the invoice's original due dates for the cash flow forecast - but never on the actual invoice.
- When an open invoice is due, the forecast due date automatically becomes the current day. In this case, purchase invoices appear in the cash flow forecast according to their forecast due date. The open amount of the invoice is updated when payments come from the bank statement. Then they are also updated in the cash flow forecast.
Payments: Shows payments for the current week. The view shows manual payments made for purchase invoices.
Expenses
Transfers: Transfers are shown according to the due date, and if the due date has passed, old transfers are visible in the current week. If a paid transfer is linked to an existing invoice, the transfer moves to payments. If there is no invoice, the transfer remains under the "Transfers" heading.
Tax account payments: Tax account payments are visible under the "Tax account payments" heading.
Salaries: Shows salaries due during the current month in total. As soon as the payroll is formed in the payroll process (but can still be in "unprocessed payrolls status"), its euros are included in the cash flow forecast. By selecting the graph with the mouse, you can see a breakdown of employees, payment day, and the amount to be paid. The payment day means the day the salary is in the employee's account. Viewing payroll data requires the payroll role.
Travel expenses: Shows payable travel expenses and the forecast payment date. The payment date is forecasted based on when previous travel expenses were paid. You can drill down directly into travel expense details from the heading, where you can see the participants of the travel expense.
Salary and travel advances: Shows the payment date and the amount to be paid.
Settlements: Shows the settlement point, type, reference number, bank account, status, and forecast payment date, as well as the amount to be paid.
Financing income
Financing income: Appears in the forecast in the week the income is marked to occur.
Loan taking: Appears in the forecast in the week the taking is marked to occur.
Other financing income: Appears in the forecast in the week the income is marked to occur.
Financing expenses
Loan repayments: Appear in the forecast in the week the repayments are marked to occur.
Dividends: Appear in the forecast in the week the dividends are marked to be paid.
Other financing expenses: Appear in the forecast in the week the expenses are marked to occur.
Total
Calculated as follows: Sales - Purchases - Expenses + Financing income - Financing expenses
Available
The available amount is calculated by adding the current bank account balance (latest information from the bank statement with or without limit, depending on what is selected in the settings) and the expected future events from the selected time period. Calculated as follows: Latest bank account balance + Sales - Purchases - Expenses + Financing income - Financing expenses. The available field for the next week comes from the previous week's available field + Sales - Purchases - Expenses + Financing income - Financing expenses. It is recommended to monitor the available balance on a daily basis, so the above formula is as accurate as possible. If the available column is viewed on a weekly basis, differences may arise, as the total column considers both realized and future events for the entire week, which may already be considered in the bank account balance.
Summary
The summary has compiled the most important figures from the company's data below. The summary section's available on bank accounts, open receivables, unpaid expenses, and open offers always show the latest situation in Netvisor and do not follow the time limit.
Available on bank accounts: Shows the available balances on bank accounts in total. In the cash flow forecast settings, it can be selected that credit limits are not considered (if considered, the information is taken from the bank statement, e.g., limit changes are also managed from the bank statement information). Additionally, if currency accounts are used, the forecast shows them with the amount on the account, i.e., it does not convert the balance to euros. The selection of accounts to be shown can be changed in Bank account management.
Open receivables: Open receivables consist of all open events in the sales ledger.
Unpaid expenses: Unpaid expenses consist of open expenses visible in the table, i.e., it does not include forecasted expenses. Unpaid expenses do not consider the user's own events but are based on actual events recorded in the system.
Open offers: Sales offers, whose amount includes all offers that are not archived.
Considerations
If an event falls on a weekend (i.e., not a banking day), the cash flow forecast moves the event to the previous or next banking day. For example, if an own event "Payment" is created for January 1st, which falls on a Saturday, the event is moved to the previous banking day, December 31st, which is a Friday. Events are moved in the forecast according to the following:
1. Travel expenses and salaries per day are not moved
2. Sales events are always moved to the next banking day
3. All other entries are moved to the previous banking day
There is no currency converter in cash flow; all events are shown in euros.
Liquidity and operational cash flow
The table below shows which figures are calculated for each graph. Note that even if own events are placed in a specific category (salaries, other financing income, etc.), they do not affect operational cash flow.
FAQ
How do I get a bank statement transaction to appear in cash flow?
Cash flow only considers the balance of the bank statement. If you want a bank statement transaction to appear in cash flow, you can add the transaction as an own event in cash flow or, if possible, make it a manual receipt in the ledger.
Keywords: cash flow forecast, liquidity, graphical representation, table view, forecast data, company financial management
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