Cashflow Forecasting and Software

Financial Statements

• The balance sheet is considered the most important financial statement.
• The basic formula of the balance sheet is: Assets = Liabilities + Equity.

Balance Sheet

• The balance sheet helps monitor a company's financial position at a specific point in time.
• It provides a snapshot of a company's assets, liabilities, and equity.

Income Statement

• The income statement is also referred to as a Profit and Loss Statement.
• The primary focus of an income statement is to show the revenues and expenses of a company over a specific period of time.
• The formula for calculating profit or loss on an income statement is: Profit = Revenue - Total Expenses.

Cash Flow Statement

• The cash flow statement is used to understand how to realize profit into cash.

Loan and Line of Credit

• When requesting a high amount of loan from a bank, a business plan and financial statements are required.
• Information necessary to successfully negotiate a line of credit with a bank includes: business plan, financial statements, and credit history.
• An accountant can provide advice on the information required by banks for approving loans and a line of credit.

Financial Professional

• An accountant is a financial professional required to adhere to certain professional standards and established accounting principles.

Cash Flow Forecast

• When preparing a cashflow forecast, it is essential to consider: sales, accounts receivable, accounts payable, and capital expenditures.

Payroll Software

• All payroll software should be compliant with relevant tax laws and regulations, such as STP (Single Touch Payroll).

Negotiating with Bank

• The best time to negotiate for a line of credit with a bank is when the business is performing well financially.

Test your knowledge on cashflow forecasting and the use of computer software programs to assist in the process. Explore the importance of considering client payment history and learn how to monitor and update cashflow forecasts.