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Financial plan: Cashflow

Analyze your cashflow and maximize your liquidity

Héctor Emperador avatar
Written by Héctor Emperador
Updated yesterday

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 sheet: represents the company's financial situation at the beginning of a new accounting period. It is usually established as the ending balance of the previous month, but you have the flexibility to adjust it according to your needs.

  • Cash in (receipts): 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 out: refers to all cash outflows made by the company during a specific period of time, including operating expenses, payments to suppliers, investments in assets, taxes and any other cash disbursements.

  • Net difference: the difference between payments and receipts (cash in - cash out) for a period. In other words, it is the sum of all the "positive" and "negative" values in the table.

  • Ending balance (month-end liquid): this is equal to the cash at the end of the previous month plus the net difference of the month itself. In other words, the final balance of February will be the final balance of January plus the net difference of February. In other words, the net difference is added to the initial balance to determine the ending 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 projection of goals is based on the financial data entered in the Goals view, although they can also be edited manually. These objectives reflect financial targets, such as expected revenues, estimated expenses, and other relevant parameters.

  • 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.

☝🏼 Note that in the cashflow, the invoices are shown including VAT. In the example above, if the invoice in March was for £1000, in the cashflow it will be shown as £1210 in September, indicating 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, once we make the payment of the invoice, associating it to a payment document, the amount will be updated in the cashflow, no longer appearing as pending in September and being recorded as a payment made.

☝🏼 Payments not associated with any specific document, i.e. single payments, are displayed under the group "Other" 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: all 4 reporting periods are taken into account to report the targets. Positive results assume compensation in the following return, while negative results are shown in the same month of the return.

  • 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:

    • Employee social security: this is calculated based on the employee social security percentage and is shown the month following the recording of the expense.

      For example, if you have an expense of €23000 for wages and salaries in March, with 5% social security for employees, it will generate an outflow of -€1150 in April in the cashflow.

    • Company social security: this is always shown the month after the expense is recorded and is based on the corresponding accounting accounts.

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 it is not. This means that you will not be able to customize the groups or subgroups of ledger accounts.

☝🏼 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 key to better understanding your treasury data. Scroll it by clicking on any cell in the table, either in the Goals or Cashflow view.

☝🏼 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:

  • Result: represents the actual money that has come in or gone out.

  • 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

For the cells in the tax lines, in the “Cashflow” view, you will not see the pending value, only the result and the foreseen (in past or current months); or the foreseen and the goal (in future months). In this case, the movements have no status, because the past is considered paid, and the future, is 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.

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