Proper budgeting and cashflow forecasting in Calxa requires an understanding of how expenses are distributed and how cashflow profiles impact financial reports. This guide covers setting an Annual expense, and then allocating proportionally across the whole year.
Budgeting Annual Expenses Over 12 Months, with a Lump Sum Payment
If you want to budget expenses such as insurance evenly over 12 months but record a lump sum cash payment in a specific month, follow these steps:
Annual Budget by Month: - Divide the total expense evenly across 12 months and enter these amounts in the Insurance Expense account.
Create a Prepayment Account: - Set up a corresponding Prepayment (Asset) account and budget the same amounts as the expense account monthly.
Adjust During Payment Month: - In the month of payment, record the lump sum payment by adjusting the Prepayment account. Specifically, reflect the payment value as 11 times the monthly amount, since one month has already been expensed in the Profit & Loss statement.
Cashflow Forecast Settings: - On both the Expense and Asset Accounts, set their Cashflow Forecast settings to 'Profile' and configure the advanced settings to '100% Current'.
This method accurately reflects the lump sum cash movement while maintaining even expense distribution across the budget year.