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.