4CastPro by 4Cast Solutions

BUSINESS PLAN TUTORIAL

Preparing a Cashflow Forecast
A month by month cashflow forecast aims to predict the monthly cash movements from a given set of sales and profit assumptions.
It takes into account VAT and credit days given to customers and taken from suppliers as well as accruals and prepayments.
A prepayment arises for example where rent is paid quarterly in advance and expensed to the P&L account monthly.
The sales template in the model allows you to enter debtor days, % Cash and VAT % for each line of sales.
The sales template in the model allows you to enter creditor days , % Cash and VAT % for each line of cost of sales.
The Expenditure template allows you to enter a VAT % for each line of expenditure
Eg 60 days would mean customers pay you on average 60 days after invoicing
Eg 50% Cash would mean that 50% of the sales are cash sales
Eg 100% VAT would mean that 100% of that category of sale attracts VAT at 17.5%
In the P&L account income and expenditure is expressed as net of VAT in the period to which it was invoiced or to which it relates
In the cashflow forecast income and expenditure is included as the amount paid or received including VAT in the period in which it paid or received.
The model takes account of the above and forecasts income and expenditure in the cashflow on the above basis