In This Article
Cash Flow Calculation Explained
Overview
The Idea Cashflow feature has been introduced as a replacement for the One-off Benefit and One-off Cost tables that were previously available on the Benefits tab in the Idea menu. For more information on the previous feature, please refer to the article titled Idea Benefits Grid. The Idea Cashflow function allows users to monitor and predict the actual and/forecasted cash flow associated to their ideas.
What's New
The Idea Cashflow feature includes the following functionalities:
- It is now possible to enter a designated name of a cashflow item.
- It is now possible to input and compute cashflow targets for each month based on the configured start and end date.
- The Cashflow grid will exhibit both the Actual and Forecasted values.
Navigation
To access the Idea Cashflow feature, kindly follow the steps below.:
- Navigate to the Idea/Initiative module. This will open the list of existing Ideas/Initiatives.
- Select the Idea/Initiative for which you wish to utilize the Cashflow feature, or alternatively, create a new Idea/Initiative. For guidance on how to create a new Idea/Initiative, kindly refer this article: Adding an Idea.
- After opening the Idea/Initiative, click on the 3-bar menu and select the Cash Flow option.
- This will open a screen similar to the one below:
On this screen you can set the 1Status of the Idea/Initiative as On Hold or Cancelled from the button located on the top-right corner of the screen. You also have the option to import actual and forecast values by clicking on the 2Import button located next to the Status button. Under the Cash Flow heading, you will find the option to select the 3Start (Month) which you desire to start the cashflow period/month from, as well as the option to configure the 4End Date of the cashflow period by clicking on Configure.
Note: The Import button is displayed based on the import permissions. For more information, please see this article: Cashflow Actuals Data Import Permissions
Cashflow Start and End Dates
You can specify the Start and End Dates of the Cashflow period, determining when the cashflow begins and ends. By default, the system selects the Evaluating stage date as the start date of the cashflow. To configure these dates, follow the steps outlined below:
- To edit the Start (Month), click on the default Start (Month) displayed on the screen. Click on the calendar icon to open a toggle calendar, allowing you to select the desired start date.
- To edit the End (Month), click on the Configure button located next to the End (Month) title. Click on the calendar icon to open a toggle calendar, allowing you to select the end date.
- The system will display the date range generated based on the configured start and end dates, prompting you to confirm to proceed with the cashflow table.
Note: The End (Month) date should be at least 1 month after the Start (Month) date.
Note: Any cashflow values that fall outside the benefit start and end date ranges will be excluded in the Cumulative benefits report calculations.
Cash Flow Grid
Once the Start (Month) and End (Month) dates have been entered, the Cashflow Grid screen will be displayed. Below the Cash Flow title, the 1Start (Month) date and the End (Month) date will be displayed as well as the following columns:
- the 2Cash Flow Name column where you can assign a name to the cash flow item.
- the 3Cash Flow Category column where you can specify the applicable category of the cash flow item. These categories are configured in Administration > General > Cash Flow Categories (for more information on how to set these categories: please refer to the following article: Cashflow Categories)
- the desired/applicable 4Annual Growth rate (Note, the automatic Cashflow calculation is triggered when the Annual Growth rate is greater than 0%)
- the 5Monthly Periods displayed according to the configured start date and end date.
- the grid 6Legend, indicating that the Actual values are presented in black font, while the Forecast values are presented in blue font.
Additionally, you may include a new cash flow entry by selecting the 7+Add section and inputting the required information. The actual or benefit values of the total cash flow for the month will be presented in the 8Total row situated at the bottom of the grid.
Cash Flow Calculation Explained
Each actual and forecasted value on the cash flow feature is calculated as follows:
- Select the applicable Cash Flow Category for the cash flow calculation. This will determine how the actual/forecast cash flow value will be treated (as an inflow or outflow). As an illustration, a category classified as Opex (operation expenditure) would compute a rise in annual growth rate as an outflow of resources, consequently leading to a larger negative value trend for the subsequent months.
- Input the desirable/applicable Annual Growth rate. When you set an Annual Growth Rate greater than 0%, an automatically computed compounded value will be generated for each period (excluding periods that contain Actual values)
- Enter the target value from the desired period to calculate the cash flow value for your idea or initiative. Once a value is inputted for a particular period, an automatic cash flow calculation, based on the selected Cash Flow Category and Annual Growth Rate , will be generated and filled in for all subsequent periods starting from the month in which the first forecast target value was entered. For example, if you enter 10000 as a forecast target value for the month of April, the cash flow value will be calculated from May onwards until the cashflow end date.
You can import the actual or forecast cashflow values instead of manually inputting them. For more information on the cashflow import, please see the following article: Cashflow Actuals Data Import
- The formular used for the Cash Flow calculation is the following:
For the month of May 2024, the cash flow calculation works as follows:
Initial Cash Flow = -10000
Growth Rate = 10%Month = 1
Months in a Year = 12
Cash flow for the month = -10079.74 (rounded to nearest 2 decimal places)
The rest of the months are computed using a similar approach, where the preceding period's cash flow value serves as the Initial Cash Flow for that month. The Total row sums up the total cash flows of the month. For example, for the month of April 2024, the total cash flow value is calculated as 20000 (from the investment received) + -10000 (from the training costs) = 10000
Cashflow on Idea Benefits
The Cashflow entries are visible on the Idea Benefits tab. These values will be displayed on the Grid view of the Idea Benefits and on both the chart and the table situated below the chart (for more information on the Idea Benefit tab, please see this article: Idea Benefits)
The Cumulative Benefit report will also display the cash flow value (when the filter to show Cash Flow on the report has been enabled), the Once-off Benefit Delivered as well as the Once-off Benefit Forecast.
Next Steps
For more information on Idea Benefits, click on the following article: Idea Benefit