Cashflow view
Cashflow is the financial plan view that shows all payments and receipts, resulting in a net difference that shows the difference between cash inflows and outflows.
At Holded, we use cashflow to project the company's future liquidity. We do this by anticipating both collections and payments of due and payable notes, as well as those of a recurring nature.
☝🏼 Cashflow only shows the actual cash movement, without taking into account other expenses such as asset amortization.
Some of the benefits you get when using Cashflow with Holded are:
You won't need to use other cash forecasting tools, simplifying everything in one place and saving on bills from other applications.
Thanks to the conection with Goals, and the automation of many processes, you save many hours of manual work, having more time to analyze and take control of your finances.
To access Cashflow, go to Tresaury > Cashflow.
📖 Learn more in our articles on how to create goals or create additional scenarios to see how they affect the profitability of your business.
Some Cashflow basics
These are the main concepts that you will handle in cashflow:
Opening balance: represents the company's financial situation at the beginning of a new accounting period. It is usually set as the ending balance of the previous month, but you can adjust it according to your needs.
Cash in: refers to all cash inflows received by the company during a given period of time, including income from sales, customer collections, investments or other sources of income.
Cash outflows: refers to all cash outflows made by the company during a specific period, including operating expenses, payments to suppliers, investments in assets, taxes and any other cash disbursements.
Net difference: is the difference between inflows and outflows (inflows - outflows) for a period. In other words, it is the sum of all the “positive” and “negative” values in the table.
Ending balance: is equal to the opening balance plus the net difference of the month itself. For example, the ending balance of February will be the ending balance of January plus the net difference of February. Or, in other words, we add the net difference to the opening balance to determine the closing balance for that month..
Cashflow data source and projection
The Cashflow in Holded is fed by various sources of information, making it a comprehensive tool for understanding your company's financial health and planning your future with precision.
Target projection and forecasting
The cashflow is divided into two essential parts: the goal projection and the document projection or forecast.
The goal projection is created from the financial data you define in the Goals view. This data includes goals, such as the income you expect to earn, the expenses you expect to incur, and other important details.
In the Cashflow table, you will see how these goals are translated into columns per month and rows showing the inflows, outflows and ending balance for each period. If you need to, you can edit them manually to adjust them to your reality.
The document projection, on the other hand, is derived from specific documents, such as invoices, payments, and payrolls. Unlike the Goals view, whose data comes from accounting entries, the cashflow extracts data directly from these documents.
For example, if you issue an invoice in March due in September, in goals it will appear in March, but in the cashflow, it will appear in September.
☝🏼 In Cashflow, invoices are shown including VAT. In the example above, if the March invoice was for £1,000, it will appear as £1,210 in September, assuming the VAT applied is 21%. This will indicate that it is an outstanding collection forecast for that month.
Automatic update of forecasts
Forecasts are automatically updated as payments associated with the documents are made. If you modify an invoice by changing the amount or the due date, these changes will be automatically reflected in the cashflow.
In the above example, when the invoice payment is made and associated to a payment document, the Cashflow will be automatically updated: the amount will no longer appear as outstanding in September and will be recorded as a payment made in the month corresponding to the payment.
☝🏼 Payments that are not associated with any specific document, i.e. single payments, are displayed under the “Financial transactions” group in the Cashflow.
Projection of cashflow goals
The cash goal projection allows you to create a budget based on your previously defined income and expense targets.
You define your income and expense targets in Goals, and configure what kind of payment/collection terms you want to apply and also what kind of taxes. Holded calculates a dynamic cash budget for you that you can edit and monitor to see if you are meeting your targets.
VAT targets:
Monthly scheme: for every month a VAT target will be displayed. The result will depend on the sign for that period. Positive results indicate a refund the following month, while negative results assume a payment in the same month.
Quarterly regime: the 4 declaration periods are taken into account to report the objectives. Positive results indicate a compensation in the following declaration, while negative results assume a payment in the same month of the declaration.
Personal income tax targets:
IRPF targets are generated based on wages and salaries expenses. The target value is always shown in the following month in which the wages and salaries expense was recorded.
For example, if you have a 23000€ wages and salaries expense in March, with an IRPF of 10%, an outflow of -2300€ will be generated in April.
Social Security targets:
The social security (employee + company) is calculated based on the total social security percentage and is shown the month following the recording of the expense.
For example, if you have an expense of €23,000 for wages and salaries in March, with a 5% total social security, it will generate an outflow of € -1,150 in April in the cash flow.
With this information, you will be able to make the most of the cashflow in Holded and make informed financial decisions for the growth of your company.
Groups of accounting accounts in cashflow
Just as in the Goals view of the business plan the structure is customizable, in the Cashflow view, although you cannot create new groups, it is possible to create subgroups and sort the accounting accounts within each subgroup.
☝🏼 Groupig of Goals accounting accounts is not maintained in the Cashflow view.
Learn here how to customize the accounting account groups in the Objectives view.
The side panel
The side panel is essential for a better understanding of your Cashflow data. Click on it from any cell of the table to display it.
☝🏼 If you were already in the edit mode of the table, then click on the icon in the upper left corner of the cell to access the panel.
1. Cells in the accounting account lines
When you click on any cell of the accounting account rows you will see three pieces of information at the top:
Actual: represents the actual money that has come in or gone out. This data comes from the payments and collections that are created, either when reconciling or manually marking an invoice as paid. When the payment is made, the document's forecast is updated, reflecting in the Cashflow that the document has been paid on the date indicated.
Pending: these are forecasts of documents, such as unpaid invoices.
Goal: comes from your financial goals, from the Goals view.
At the bottom, you will see the movements and the payment forecasts associated with each document.
☝🏼 A document can generate multiple forecasts (multiple lines) if it has, for example, multiple due dates or different accounting accounts assigned to it. Each line in the side panel represents one of these forecasts.
Each movement or forecast can also have different statuses: paid (green check), pending (yellow exclamation), or with alert (red X). Click on any of these movements to open the corresponding associated document.
☝🏼 Note that if you create a forward invoice and mark it as paid, the cashflow will record it as a “pending” forecast until its due date, unless you generate a forward payment within the current month, in which case it will be posted immediately (you can see this in the floating text by hovering the cursor over the corresponding cell).
2. Cells in the tax lines
In the cells of the tax lines, you will only see the data for realized and expected (either in past or current months), or expected and target (for future months). No pending values are shown, since past transactions are considered as already paid, and future transactions as pending.
A special case to consider is duplicate payments, which can occur when reconciling bank transactions. In these cases, you can check the “Do not post” box to indicate that a payment already exists in the treasury and avoid duplicate entries.
In addition to querying information, the side panel allows you to do advanced editing of goals. You can learn more about how to do this here.